Troubled Legend Airlines Suspends Service
D A L L A S, Dec. 2 -- Legend Airlines, a start-up that said last week ithad lost $1 million a week in its first six months, shut downoperations today.
Legend executives decided late Friday to suspend operationsuntil it can raise more capital, according to a statement releasedtoday.
Spokeswoman Kim Plaskett said she was not prepared to say howlong the suspension would last and what the airline’s prospects forrecapitalization were.
Continental Airlines and Continental Express have agreed tohonor Legend tickets to all destinations. Customers will fly toCleveland or Houston before heading to their final stop. Otherairlines also may step in to help out, Plaskett said.
From its Dallas hub, Legend serves New York, Washington, Los Angelesand Las Vegas.
Organized in 1996, Legend attempted to challenge FortWorth-based American Airlines for business travelers in theDallas-Fort Worth market by offering first-class amenities, such asleather seats and in-flight live television, aboard 56-seat jets.
American and the city of Fort Worth tried to block the airline’sstart-up, but Legend won the lengthy court battle and began flyingfrom Dallas Love Field on April 5.
Flying in the Red
Last week, Legend filed documents with the U.S. Department ofTransportation that indicated that it lost $25.6 million from itsuntil the end of the third quarter on Sept. 30, and had lost nearly$44.7 million since it was formed in 1996, including expenses forproperty, equipment and employees.
As of Sept. 30, Legend had $184,522 in cash on hand and had beendrawing down by nearly $14,500 a week during the third quarter. Atthat rate, it would run out of cash the week of Christmas.
Legend President and CEO T.Allan McArtor said last week that the company would be able toraise enough capital to keep going. He said advance ticket salesfor the holiday season and early 2001 are “very strong.”
Legend’s investors had about $8 million equity in the company asof Sept. 30.
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