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MARKAIR ANNOUNCES INNOVATIVE PLAN TO EMERGE FROM BANKRUPTCY

 ANCHORAGE, Ala., May 11 /PRNewswire/ -- MarkAir announced today that it has presented an innovative plan to its creditors that will allow the carrier to emerge from bankruptcy in June of this year.
 The plan offers unsecured creditors debentures, or promissory notes, that will result in payment of 100 percent of the debt, plus interest, within five years. For earlier debt payment, creditors can exchange the debentures for travel vouchers on MarkAir flights and will be permitted to sell these vouchers to third parties such as travel agencies.
 "The company's plan is unique in not only providing full payment of all debts but also offering the opportunity for creditors to receive early repayment by accepting travel services which they can either use or sell," said MarkAir attorney Gerald K. Smith, partner of the Phoenix, Ariz., firm Lewis and Roca, who is also chairman of the board of regents, American College of Bankruptcy. "MarkAir is expected to become one of the few major airlines to fly itself out of bankruptcy without outside investment and to pay its unsecured creditors 100 cents on the dollar."
 Most of the secured creditors and lessors are already in agreement with their treatment under the plan, and unsecured creditors will be asked to accept the plan by voting on it before the end of the month.
 "We are determined to make our creditors whole, and continue operating as Alaska's premier airline," said MarkAir President Mike Bergt. "Our expansion program during the bankruptcy proceedings has significantly increased the value and options we offer our customers, and has enabled the company to achieve profitability."
 "MarkAir reported a 33 percent increase in sales during the first three months of 1993 compared with the same period a year ago, and in March the company registered its first profit ever during this traditionally low-traffic period in Alaska. The improved operating performance since declaring bankruptcy June 11, 1992, has been due to increased flights and expansion in the lower 48 states," said Neil Bergt, MarkAir's chairman.
 MarkAir provides passenger service to more than 140 communities throughout Alaska, and over the past year has rapidly expanded its service throughout the United States. The airline now offers low-cost daily flights serving Seattle; Los Angeles; Las Vegas; San Diego; San Francisco; Portland, Ore.; Denver; New York; Chicago and smaller cities in the Midwest.
 The MarkAir debentures can be exchanged for travel vouchers in $250 increments, and the travel vouchers can be used to purchase tickets on a dollar-for-dollar basis. For example, a creditor can use the vouchers to purchase same-day first class tickets or 14-day advance coach tickets, and will be charged published fares available to the general public.
 "Travel agents should be very interested in these vouchers," said David Balfour, vice president of sales and marketing. "They could buy them at a discount and then offer some or all of the discount to their customers."
 Mike Bergt said this plan offers a win-win situation to both the creditors and agents. The creditors can receive immediate cash for their debts, and agents can use them to attract customers. In addition, travel agents continue to receive a commission on every ticket written for MarkAir, whether or not the ticket was written on a travel voucher.
 In order to regulate the amount of voucher travel, MarkAir's plan calls for up to one-third of the debentures to be exchanged for vouchers in the first year after MarkAir has emerged from bankruptcy, one-third to be exchanged in the second year and one-third in the third year. MarkAir predicts that approximately 70 percent of the $15 million of debentures will be exchanged in this manner.
 The plan has been mailed to creditors and their response is due May 21. After the votes have been tallied, MarkAir will go before the bankruptcy court on June 2 for final approval.
 The company's rapid recovery has been due, in part, to recent changes in the airline industry which have created new opportunities for low-fare carriers. MarkAir plans to continue to benefit from this trend in the future, Mike Bergt said.
 -0- 5/11/93
 /CONTACT: David Balfour, 907-266-3674, or Sam Huff, 708-382-7404, both for MarkAir/


CO: MarkAir ST: Alaska IN: AIR SU:

TS -- NY036 -- 6995 05/11/93 11:14 EDT
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Date:May 11, 1993
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