MARKAIR, THE Alaska-based carrier which emerged from Chapter 11 in 1994, has again sought federal bankruptcy-court protection following a demand for overdue lease payments from General Electric's GE Capital Aviation Service (GECAS).

MarkAir filed for Chapter 11 after GECAS warned the carrier that it would repossess four of its remaining ten Boeing 737s if no lease payments were received within eight days. The four 737s at the centre of the issue are owned by the GPA Group, but, along with two other GPA-owned 737s in the MarkAir fleet, they are managed by GECAS. Earlier this year, lessors repossessed five 737s from the fleet, which had grown to 15 at one point.

The airline made a modest operating profit of $3.4 million in 1994, but reported overall losses in 1993 and 1994. It also failed in its bid to gain financial backing from Denver and the state of Colorado when it proposed moving its headquarters from Anchorage to Denver.

MarkAir first filed for Chapter 11 protection in mid-1992 and expanded rapidly during the next two years by opening new routes to the eastern and southern USA.

MarkAir has decided to withdraw all commercial-jet operations from Alaska and return four-leased Boeing 737s to GPA. It will now concentrate all jet-airliner activities around a fleet of six 737s based at Denver.

Regional subsidiary MarkAir Express will continue to operate services within Alaska, while the parent company will operate only south of Seattle, Washington.

MarkAir also says that it hopes to re-open negotiations with the city of Denver over a financial-aid package similar to the $30 million deal which was rejected by the Colorado community in 1994.

Alaska Airlines, long time arch rival of MarkAir, has reported a first-quarter loss of $16.3 million, compared to $6.3 million a year ago. Much of the larger-than-expected loss is blamed on lower ticket prices following fare wars on many Alaska trunk routes.

Source: Flight International