Allegiant Air, Inc. Files for Chapter 11 Bankruptcy Protection; Airline Continues to Fly Charters and Las Vegas-Fresno Route

Business Wire, Dec 13, 2000

Business Editors/Transportation Writers

FRESNO, Calif.--(BUSINESS WIRE)--Dec. 13, 2000

Allegiant Air, Inc., a privately-held all-jet air carrier providing scheduled and charter operations in the West, today announced that the skyrocketing price of fuel has caused it to voluntarily seek protection from creditors and reorganize its business under Chapter 11 of the United States Bankruptcy Code.

The company said its scheduled airline service between Fresno and Las Vegas and its charter operations will continue without interruption.

The company filed for bankruptcy protection today in the Fresno Division of the Eastern District of the United States Bankruptcy Court.

Along with the Chapter 11 filing, the company said it is aggressively pursuing its strategic alternatives, including additional funding, sale of the company and/or partnerships to strengthen the company and its financial position. The company has already arranged for a debtor-in-possession credit facility through one of its largest creditors in order to help fund the company's reorganization efforts.

"The decision to file for Chapter 11 was difficult, but necessary in order to continue to operate in the current business environment," said Mitch Allee, Allegiant Air Chairman and CEO. "This move gives us the opportunity to continue with our charter operations and most productive scheduled service while we reorganize the company and eventually emerge as a stronger airline.

"Meanwhile, the people of Allegiant Air continue in their dedication to deliver an outstanding airline product," said Allee.

The company announced last week, when it suspended service to four cities, that it has seen jet fuel prices climb from 80 cents a gallon one year ago to current prices at $1.38 a gallon, a 73% year-over-year increase in the airline's single largest expense item.

The company said that it has furloughed a total of 112 full-time and part-time employees and retains a staff of 51 employees based in Fresno.

The company said it continues in good standing with the Department of Transportation and the Federal Aviation Administration as a certificated scheduled air carrier.

About the Company

Allegiant Air, Inc., founded in 1997, is certificated by the U.S. Department of Transportation as a "scheduled air carrier" with authority to fly scheduled and charter airline operations throughout the U.S. Headquartered in Fresno, California, the privately-held company operates an all jet fleet of four DC-9 aircraft.