Friday, May 7, 2004 | 10:41 a.m.
A subsidiary of Air Vegas Airlines -- a Grand Canyon air tour operator that has operated in Southern Nevada since 1971 -- has filed for Chapter 11 bankruptcy protection.
The president of the airline said the company would continue to operate routinely while it reorganizes its finances.
Jim Petty, whose company struggled because of the significant downturn in international business after the Sept. 11 terrorist attacks, said the tour operator has advanced bookings that indicate it could have near-record results this summer.
According to documents filed in U.S. Bankruptcy Court in Las Vegas last week, AVI Inc. -- a subsidiary of Air Vegas Enterprises Inc. -- has between $1 million and $10 million in assets and debts and up to 49 creditors. The company is expected to file details of assets and debts later this month.
AVI is a holding company for Air Vegas' fleet of nine Beechcraft C-99 twin-engine turboprop tour planes that carry 15 passengers each. Air Vegas currently operates about 25 air tour flights a day, mostly over Grand Canyon National Park.
The filing said AVI's board of directors decided to seek Chapter 11 protection to reorganize its finances because it is not able to make a payment to Pacific Aircraft Finance LLC, a Nevada company that leases the planes to the airline. The board voted to file because it is behind on four lease payments totalling $360,000.
Phil Hoffman, general manager of Pacific Aircraft Finance, said he has yet to see the bankruptcy filing and had no comment on whether the lessor would negotiate concessions with the airline.
Petty said Thursday that none of the company's 100 employees would lose their jobs and that the filing would not affect the company's air tour schedule.
"Comparatively speaking, all the stars are lined up right" for a profitable summer, Petty said.
"We've received a lot of phone calls for prebooking and the exchange rate is favorable for international travelers," he said.
While the air tour industry has worked to beef up marketing domestic customers, most air tour travelers are international visitors who look at their visit to Las Vegas as an opportunity to see the Grand Canyon.
Petty said in recent years, air tour companies have downsized their fleets to make capacity more closely match demand.
"In some of the tour and travel shows that we would attend over the past two years, there were a lot of long faces and we looked over who went out of business," Petty said. "But at the International Pow Wow in Los Angeles, there were two or three rows of booths from Las Vegas alone so things are looking favorable."
Petty said the company plans to reorganize its debt structure to continue to operate its planes. According to the court filing, other major creditors of AVI are the Arizona Department of Transportation Aeronautics Division, which collects landing fees at Grand Canyon's airport at Tusayan, owed $140,000, and several aircraft maintenance, supply and service companies.
The petition was filed April 30 and assigned to Judge Linda Riegle, who presided over the National Airlines bankruptcy case in 2001 and 2002. Creditors are scheduled to have their first meeting June 9.
archive
