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Kiwi sees Nov. relaunch
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October 23, 1996: 3:50 p.m. ET
Bankrupt carrier, with new financing, may resume flights soon
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NEW YORK (CNNfn) - Bankrupt Kiwi International Air Lines, which Tuesday secured $5 million in financing a week after halting operations, could resume flights as early as next month.
"We would expect to be up and running sometime in the middle of November," Kiwi chief Jerry Murphy said Wednesday during an appearance on CNNfn.
A federal bankruptcy court has scheduled an Oct. 31 hearing to consider $5 million in Debtor-in-Possession financing that Kiwi secured from the Wasatch Group.
The lifesaving cash infusion could allow Kiwi to return to the skies one month after halting operations.
Kiwi stopped flying on Oct. 15.
The carrier also entered Chapter 11 bankruptcy protection on Sept. 30 following a series of events that began with the deadly May crash of a plane operated by ValuJet, a Kiwi competitor.
The crash prompted the Federal Aviation Administration to ground of all ValuJet aircraft, undermining consumer confidence in all no-frills airlines.
The FAA then temporary grounded Kiwi amid questions about the Newark, N.J.-based carrier's safety and pilot training.
Murphy said Wednesday that the developments drove travelers away from Kiwi.
"What the consumers did was go to the major airlines, thinking that if you are low cost, you are unsafe," he said. "That actually is the furthest from the truth."
But Murphy can't convince the public that Kiwi is safe until he first gets creditors and a bankruptcy judge to approve Kiwi's reorganization plan.
Even then, $5 million in fresh financing won't keep the airline in the skies for long.
Murphy said he is already weighing options for additional investment, including a public stock offering designed to raise $15 million to $20 million.
"We believe we will be able to get the airline back during the reorganization process," Murphy said.
"Consumers have been supportive," he added. "I believe they will come back because of the low fares Kiwi offers -- and the service we provide."
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