Friday, June 22, 2018
Business

Avantair's troubles mount: Employees furloughed, fleet grounded

CLEARWATER — The future of fractional airline Avantair grew dimmer on Wednesday when the company reported that it is furloughing pilots and workers, needs additional financing to start flying again and is even in danger of having some of its planes repossessed.

On top of all that, the company also became the target of a class-action lawsuit filed in Oklahoma this week that could be joined by hundreds of other plaintiffs.

Avantair employs around 500 people and operates out of St. Pete-Clearwater International Airport. It allows customers to buy shares of the company's fleet of private planes so they can schedule flights when they want to fly, skipping the hassles of commercial air travel.

But in a filing with the U.S. Securities and Exchange Commission on Wednesday, the company admitted to a new slew of problems. Not only does the company need to find more money to start operating again, but the filing also said it is behind on payments for aircrafts.

The companies that leased Avantair those planes, Midsouth Services Inc. and Clear Aircraft Inc., told the Clearwater company it violated their contract. The two companies could take back its aircrafts and engines. It was not known how many planes could be repossessed.

Avantair's employees also received a letter Wednesday that said the company would not make payroll Friday for the hours they've worked since June 8. The company said it will maintain health, dental and vision plans for its workforce through the end of the month.

The company also released this statement Wednesday to the Tampa Bay Times:

"Today Avantair conducted a furlough of its employees as it addresses liquidity issues. It has requested that several specialized employees remain with the company voluntarily as it pursues alternative financing arrangements.

"The company regrets having to enter into this process and for the inconvenience this brings to Avantair's owners and card holders but believes it to be the most prudent action at this time.

"It is hopeful that it will soon be in a position to resume operations."

Avantair's financial issues seem tied to its safety issues. Twice in the past eight months Avantair grounded its entire fleet to conduct safety reviews of aircraft and inspection procedures.

Last summer one of Avantair's planes lost its left elevator, which fell off during a West Coast flight. By October, the company grounded its fleet of nearly 60 aircraft to conduct safety inspections. Avantair furloughed a large number of workers during that review.

Avantair's planes were cleared to fly again. But the fleet was grounded a second time on June 7 because of a potential issue involving the inspection of time-sensitive parts. The company does not appear to have flown since.

The Oklahoma lawsuit was filed by Heisman Square LLC. It says Avantair has failed to "adequately service" customers ever since October's furloughs and safety inspections. Failure to provide air service is also the reason why Polk County businessman C.C. "Doc" Dockery sued Avantair in Pinellas-Pasco Circuit Court last week.

Jamal Thalji can be reached at [email protected] or (813) 226-3404.

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