Hawaii’s second-largest airline, Island Air, has filed for Chapter 11 reorganization bankruptcy.
The company states the bankruptcy filing was caused by threats of legal action to ground the aircraft and strand hundreds of passengers. The filing prevents the threatened action and allows it to continue interisland service for its customers.
The airline just this year brought in a new fleet of larger aircraft as part of an aggressive expansion strategy.
This is Island Air’s first bankruptcy filing in 37 years of operation. The airline has lost money for 17 straight quarters.
During the reorganization, Island Air stated it expects to fly its scheduled routes as normal and honor all previously purchased tickets and confirmed reservations.