Bloomberg New Service
DALLAS — Legend Airlines Inc. surrendered its license and expects remaining assets to be liquidated, ending the start-up carrier’s effort to lure business travelers from rivals such as American Airlines by offering all first-class service.
Legend, led by former Federal Aviation Administration head T. Allan McArtor, filed for reorganization and protection from creditors under Chapter 11 bankruptcy in December. The carrier had sought to resume flights, though it failed to secure more financing and decided to close for good, McArtor said.
"We had 30 days to see if we could find a white knight," he said. "We were not able to do so, and we’re voluntarily surrendering our certificate" to the FAA. "We’ve exhausted just about every avenue that we know right now for trying to secure investment."
The FAA said closely held Legend surrendered the certificate today, ending its effort to lure business passengers, who tend to pay higher fares than leisure travelers, from carriers such as AMR Corp.’s American.
McArtor expects the company’s Chapter 11 bankruptcy to be converted to Chapter 7, or liquidation. Most of the carrier’s assets, including its Love Field terminal in Texas and seven airplanes, were leased, so there is little to sell, he said.
"That’s why the creditors’ committee was very anxious to see us fly again," he said. "That was their best chance to see any return."
Legend began flights last April after a three-year court battle for the right to make longer-distance flights from Love Field, an airport near downtown Dallas, the hometown to the headquarters of American, the second-largest U.S. carrier.
Direct flights from Love Field were limited by law to Texas and seven other nearby states. Legend won its legal battle for longer flights through a clause exempting planes with 56 or fewer seats, then reconfigured DC-9s to hold 56 first-class sets.
Legend was flying from Dallas to Washington, Las Vegas, Los Angeles and New York when it halted flights in December.
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