Florida-based regional airline Silver Airways, which entered Chapter 11 bankruptcy on December 30th, has abandoned Anguilla “effective immediately.” Customers with flights are on their own to find other options. And the circumstances around this decision are mysterious, with the carrier pointing fingers at Anguilla’s government.
Silver Airways claims that the Anguillans insisted that Silver Airways “violate US law” and they have to cease service because they “refused to do so.”
Silver Airways continues,
The Anguilla government was aware that US law does not allow certain payments and the Anguillans insisted that we violate US law to collect more money than they were entitled.
The first thought whenever a U.S. company says they’ve been asked to violate U.S. law in another jurisdiction is bribes (Foreign Corrupt Practices Act). However, Silver Airways is in bankruptcy so my first thought went to prioritizing debt payments outside of court approval.
Here, though, Silver claims they were being asked to collect more money than the government of Anguilla was entitled to receive. Beyond this, Silver is being coy, but my thought is that what an airline collects on behalf of the government is the $20 Anguilla infrastructure tax and $5 security fee per passenger so it seems likely to involve these funds.
Credit: Silver Airways
Given the bankruptcy – and this is where I’m speculating – perhaps Anguilla is unwilling to trust the usual course of business for disbursement of these funds, and is perhaps insisting that it receive those monies up front or that passengers pay them in cash at the airport despite having already paid the airline.
The entire affair is highly unusual. Airlines that are continuing to operate do not usually cease a route with no advance notice whatsoever, leaving passengers stranded, and take to social media to blame a government for their decision to do so.
Update: Anguilla says Silver Airways had $103,000 in unpaid airport fees and was kicked out.
Think you read that wrong… It’s the government of Anguilla that is (allegedly) asking to be paid by Silver more than Silver is allowed to legally pay them.
I highly doubt bankruptcy law prevents the payment of government-mandated taxes/fees. So either Anguila is asking to be paid something else (back fees for airport use?), or maybe Silver has collected a bunch of fees it then used to fund operations instead of holding separate to remit to Anguila.
That’s funny because a week ago Silver and its codeshare partners jetBlue, United, etc. were suggesting ‘everything’s fine’ and ‘nothing to see here’ and ‘we’ll be back stronger than ever’ …
Maybe we shouldn’t trust Silver (or any bankrupt airline for that matter).
airlines collect these fees, in advance, and pay the respective airports & authorities once monthly.
Something tells me they are in deep arrears (like a few months, if not a year) and Anguilla demanded passengers pay at check-in the fees.
…. i mean, its not like I’ve ever seen this before (whistles)
“I highly doubt bankruptcy law prevents the payment of government-mandated taxes/fees.”
If there’s an arrearage, this might be an issue – while government entities usually occupy a very senior position in any bankruptcy proceeding, if there were potentially other governments/government entities (say, Florida/the US) at that level then it would be up to the bankruptcy court to handle who-gets-what and that might preclude
The other issue is, of course, that Anguilla might have been demanding advance payment. If Anguilla turned around and said “We want next month’s payments now”, that could prejudice other folks lined up at the bankruptcy trough.
One thing I think this does highlight is that the US could do with some stronger provisions regarding requiring a carrier that pulls service on a given route within X days to (1) make equivalent alternate arrangements for pax who still want to travel and (2) absolutely have to cover any “return legs” of trips in the event of a shutdown. Mind you, this would probably need some sort of insurance fund…but given how most of these things are with smaller airlines, something like a $0.02/ticket tax (that would generate like $18-20m/yr) would probably cover the costs of such a program.
Silver serves SJU-SXM. A ferry ride away from Anguilla.
You can be sure these guys were collecting fees and not turning them over to the government. It’s been a shell game at Silver for 7-8 years though they are trying to blame it on COVID.
@HkCaGu
At this point, those stranded will get home faster if they swim.
For real though, if they booked through UA or B6, yes, fine, ferry to SXM, then to EWR or JFK.
Or, just be done with this nonsense and book a new flight from AXA with American to MIA, then get to wherever you need to go.
The sad thing for us is when the airlines fail us, we often have to fix it ourselves, and we rarely get more than a partial refund for our troubles. I wish we had better consumer protections. Then again, with bankruptcy, all bets are off. Do not trust Silver, folks.
FYI, out of Anguilla (AXA), the airline does NOT collect departure tax. Each passenger has to pay it on their own in the terminal after check in and before security. Just did this last week flying AA.
@Samsunshine Levy – I perhaps could have been clearer about which taxes are included in the ticket, and which are not, but while you’re referring to the embarkation tax there are other taxes the airline does collect for Anguilla. Here’s an American Airlines one-way AXA-MIA breakdown:
As an ex silver airways employee I believe they were kicked out of AXA. Couple years ago when I was still working with the company they had the same problem at the main hub in FLL. They were behind on payments to the airport and FLL gave them like a week to pay if not they would be kicked out
A little remedial English may be in order. The “we” relates to “violate US law” and the “they” relates to “collect more money”.
Back taxes to the United States is #1 on the list of debts to be paid under Chapter 11. I doubt that applies to “taxes” to foreign governments as well.
You can just imagine all the things that could be defined as “taxes” in all the countries in the world.
The bigger question is why didn’t United fix the problem and help passengers. I am one who was notified yesterday that my round trip flight booked 4 months ago on Silver wouldn’t go through… all the while Silver emailed me twice yesterday with my itinerary and tickets.. and United actually called and told me they are all canceled. To the ones suggesting to fly to sxm and then over, United advised they had no capability to do that. We had to pony up with charter air one way and cape air the return flight to the tune of an additional $1800… pure insanity and silver blames United and United blames silver. No one will help. United asked me to fly to st kitts and then get an uber to Anguilla ↕️.