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Kiwi to cease flying
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October 15, 1996: 4:59 p.m. ET
Lack of financing forces discount carrier to ground planes Tuesday
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NEWARK, N.J. (CNNfn) -- Kiwi International Air Lines will cease operations after its last flight Tuesday and will soon close permanently if a buyer is not found.
Kiwi's final scheduled flight will arrive in Newark, New Jersey from Chicago at 10 p.m. ET.
The company was forced to stop flying after it was unable to secure money that would keep it afloat until a buyer could be found.
The bankruptcy judge accepted Kiwi's decision to ground itself and set a hearing date for Oct. 22 at which time Kiwi would present a plan to liquidate the company's assets if no new owner can be found.
Kiwi's financial problems forced it to file for bankruptcy Sept. 30. After filing, the carrier canceled more than half of its flights and laid off 400 workers.
The carrier had made several attempts to arrange financing, but was never able to close a deal. At U.S. Bankruptcy Court Tuesday, Kiwi said it does not have enough money to pay for fuel and food as well as salaries for baggage handlers in Newark, Chicago and Atlanta. Those were the only cities the carrier served after its initial bankruptcy filing.
The company said the rest of its cash on hand will be used to shut down the airline. According to Kiwi's attorneys, the carrier has about $35 million in assets and $55 million in liabilities.
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