Silver Airways Finds a Stalking Horse Bidder
After securing $5.7m loan, the future still looks iffy for the pink planes
KEY WEST — Just as one airline is getting ready to start coming to Key West, another may be getting ready to leave — for good.
The sun may be setting for Silver Airways, which with its drastically reduced fleet-size continues to serve the Fort Lauderdale and Tampa markets from Key West.
On Dec. 30, 2024, the only regional airline in the U.S. that uses turbo prop aircraft, filed for bankruptcy.
Last week, the company was offered a $5.7m lifeline from KIA II, LLC, which has a history of making offers on failing or challenged airlines. Earlier in the year, the investment firm loaned Silver $5m to keep planes flying and to make payroll and other expenses.
The $5.7m “stalking horse” bid will serve as an opening bid for other potential buyers.
Silver has become known as slow payers in the airline world, having nearly being evicted from their main hub at Fort Lauderdale several times.
Earlier this year, the airline abruptly closed its Orlando station leaving passengers stranded in Orlando, Key West and elsewhere.
Any potential sale would not include Silver’s Seaborne subsidiary which provides critical transportation needs in the Carribean.
The trustee overseeing the bankruptcy said that the reorganization plan submitted by the company didn’t acknowledge the reality that its fleet would be severely limited following repossessions of aircraft and engines by several aircraft lease companies which would in turn impact Silver’s already terrible operational metrics.
Silver also owed Monroe County nearly $70k in past due rent and passenger fees that it collected; the beleaguered company owed a similar amount to the Tallahassee Airport Authority.
Both airport authorities are seeking payment through legal channels.
Several Caribbean islands reported similar past-due debts, going as far as forcing Silver to stop serving several airports.
It becomes a problem when you collect passenger fees and don’t pay the landlord.
The Sun Sentinel has a great piece on this complex subject.
However, if you have flights scheduled be sure to have a backup plan.
The Trustee overseeing the bankruptcy has recommended that the company be liquidated. To date, the airline has around $90m in assets and more than $400m in debt.
She called their exit strategy “fanciful.”
When booking travel, make sure that you are not on a code share flight with Silver… they have agreements with several major airlines and you might end up having a problem if not flying on mainline or regional metal.
Considering that the company lost $2M in the first week of February, $5m isn’t going to last very long.
A federal bankruptcy court hearing is scheduled for today, Wednesday, May 7 to determine its future, but the judge is expected to extend the deadline so Silver can entertain other offers.
Interestingly, Breeze was one of the airlines that looked at purchasing the airline, so they got a chance to look under the hood.
Apparently, they didn’t like what they saw so they decided to throw their own regional jets into the same markets that Silver has traditionally served.
The airline industry is a great way to make a small fortune.
Especially if you start with a big one.
Ed. Note: The author worked for Silver for 18 months. The EYW station has fantastic employees and leadership. The problem is not Key West. It is in Fort Lauderdale, and its name is Rossum.