Air taxi operator DayJet Corp. became another casualty of tough times for U.S. aircraft operators, announcing Friday it has ceased passenger services and eliminated most of its 160 employees.
"Regrettably, without access to growth capital, we have no choice but to discontinue operations," said DayJet founder Ed Iacobucci, who stepped down as the company's president and CEO.
The Boca Raton-based company, which offered flights from St. Petersburg-Clearwater International Airport, said it can't honor reservations or issue refunds.
While DayJet's shutdown is a "direct consequence of the company's inability to arrange critical financing in the midst of the current global financial crisis," operations "also suffered as a result of Eclipse Aviation's failure to install missing equipment or functionality or repair agreed technical discrepancies in accordance with the terms of DayJet's aircraft purchase contract," a company statement said.
Recently, the FAA's certification of the aircraft has come under scrutiny by federal and congressional investigators who say the agency ignored safety concerns involving the jet's design and manufacturing.
DayJet filed 93 "service difficulty reports" to the FAA since the aircraft was certified in 2006, congressional testimony shows.
An Eclipse spokeswoman declined to comment Friday.
DayJet told federal aviation authorities Friday afternoon of its plans to ground 27 of its 28 aircraft for "economic reasons." One plane would continue operating for "use by executives," FAA spokesman Les Dorr said.
As of Friday afternoon, the company had not filed paperwork to surrender its FAA operations certificate.
Ed Iacobucci, the retired executive and founder of software giant Citrix Systems Inc., had bet DayJet could revolutionize flying by incorporating the latest aviation technology into a boutique business model. His business plan was inspired by a personal dislike for flying on commercial airlines, which often resulted in wasted time and regular hassles.
DayJet, which was founded in 2002, relied on computers to dispatch flights. To use the service, companies or individual fliers purchased a "membership," and agreed to fly a certain number of trips. And the company offered discounts to travelers who could allow for flexible scheduling.
Even as the company discontinued operations Friday, Iacobucci asserted that the company had "demonstrated beyond a reasonable doubt" that DayJet's business model "works."
The company claims it built a membership base of more than 2,400 regional travelers since its service launch last October.
However, signs of the company's financial crisis first surfaced in May when DayJet laid off 100 employees, nearly half its work force. At the time, DayJet said it had to scale back expansion because it could not get the $40-million in financing called for in its 2008 business plan.
The company recently appeared to be healthy. In July, it announced 14 new destinations, a 30 percent expansion to its route network. Last week, DayJet told customers it would start offering weekend service across its entire system.