From the Post-Tribune:
SkyValue bails, cites weak demand
April 28, 2007
By Jon Seidel Post-Tribune staff writer
GARY -- SkyValue USA has canceled summer service out of the Gary/Chicago International Airport, a spokeswoman said Friday, blaming low customer demand for upcoming flights.
Meanwhile, airport director Chris Curry acknowledged loaning an undisclosed amount of airport money to the cash-strapped airline without the approval of its board.
SkyValue's last flight from Gary will be May 6, with refunds available for the canceled flights.
Spokeswoman Gabrielle Griswold said SkyValue will decide later this year whether to return for winter service.
"The marketplace has been slow to step up and pay what are normal prices," Griswold said.
'Psychological block'
Florida-based SkyValue reported high ticket sales earlier this month. Griswold said the airline's winter program had been a success, but demand is not picking up for the summer.
Griswold said the airline's customers have a "psychological block" and want to pay between $79 and $99 per ticket.
"Frankly, nobody can run a service out of there on those prices," Griswold said.
SkyValue spent most of the day Friday in negotiations trying to prevent the cancellation, Griswold said.
"The financial strength is not there at this time," Griswold said.
Leading up to this announcement, passengers have begun complaining about consistent delays. A flight to Florida was delayed at least 11 hours Thursday.
According to SkyValue's Web site and information hotline, its Friday flight was delayed five hours.
Word of SkyValue's imminent demise traveled quickly in Gary on Friday.
In the morning, Mayor Rudy Clay said he heard SkyValue had "major financial problems," and he was trying to find a way to prevent the loss.
After learning of SkyValue's canceled service, Gary Mayor Rudy Clay said the city will continue to expand its airport.
"Just because it's raining at the airport doesn't mean we're going to drown," Clay said.
It's not the first airline to fail in Gary, though.
Pan American Airlines began passenger flights out of the Gary airport in 1999, but shut down in 2002.
Southeast Airlines started serving passengers in Gary in February 2004, just to end service 10 months later.
Hooters Air also flew out of the Gary airport between June 2004 and December 2005.
"It's not like we haven't experienced this before," Curry said.
'I'm on vacation'
SkyValue's troubles were dire enough that the airport has been giving SkyValue money without first asking the airport authority.
When asked how much public money was given without first checking with the board, Curry refused to comment.
"I don't want to talk about it anymore," Curry said. "I'm on vacation."
Authority member Harold Foster confirmed that no vote had been taken on the payments, though he said the board would not have necessarily been opposed to authorizing them.
"Some decisions were made," Foster said, "and I think they were made with the intention of keeping the airline solvent.
"It didn't go the correct way."
Other board members including Silas Wilkerson and John Evans, either did not know about the payments or wouldn't acknowledge them.
"If there was any money given," Wilkerson said, "it definitely wasn't approved by the board."
A special meeting of the Gary/Chicago International Airport Authority has been called for 9:30 a.m. Tuesday.
Curry said he will ask the board to ratify the payments at that time.
http://www.post-trib.com/news/361971,skyvalue.article
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