Pride Air Files For Reorganization Under Federal Bankruptcy Laws
Dec. 03, 1985
NEW ORLEANS (AP) _ Pride Air, a fledgling airline founded by former strikers at Continental Airlines filed for reorganization under federal bankruptcy law Monday, burdened with overdue bills and angry ticket holders.
''It was a legal action that we had to take at this point in time in order to protect our primary investments and get back in the air,'' said Pride spokesman Kiv Kiviranna. ''Right now we're targeting getting off the ground by the Christmas holidays.''
The airline, which opened headquarters four months ago here and filed its first public stock offering in September, stopped its 44 daily flights Nov. 15, failed to meet its payroll Nov. 22 and laid off its 566 employees Nov. 26.
The move left as many 3,200 people without flights each day of the Thanksgiving weekend.
American Airlines said it stopped honoring Pride tickets Nov. 23 because Pride failed to meet its obligations to American under an interline ticketing agreement.
Pride officials said last week that the airline had about $2.5 million in overdue bills, and the First National Bank of Commerce - the airline's local bank - had frozen $200,000 in its accounts.
Pride is run by Paul R. Eckel, a one-time chief pilot at Texas-based Continental, which filed for bankruptcy protection more than two years ago and slashed wages by 50 percent to cut costs and resumed flying three days later.
Continental's employees went on strike Oct. 1, 1983, and many later joined Eckel in forming Pride, largely with a $15 million investment from pension funds they got from Continental, which is now making a profit.
Pride operated eight Boeing 727 jetliners out of its New Orleans hub, with service to Los Angeles; San Francisco; San Diego, San Jose and Sacramento, Calif., Las Vegas, Nev.; Denver; Salt Lake City; Miami; Fort Lauderdale, Orlando, Tampa, Jacksonville, West Palm Beach and Sarasota, Fla.