Great Plains Applies for Loan Guarantees
Tulsa, Okla.-based Great Plains Airlines became the second regional airline to seek federal loan guarantees under the Air Transportation Safety and System Stabilization Act. The struggling Fairchild Dornier 328JET operator joined Aloha Airlines, Frontier Airlines and Peachtree City, Ga.-based charter company World Airways in applying for the guarantees just ahead of the government’s July 1 deadline. In late May the Air Transportation Stabilization Board (ATSB) rejected the only other regional airline to apply for the guarantees–Fairbanks, Alaska-based Frontier Flying Service.
Still flying scheduled service with its pair of 328JETs to five cities in the southern plains states under Ozark Air Lines’ operating certificate, Great Plains asked for a $61.5 million guarantee to help finance 10 new regional jets. It originally expressed interest in between six and 10 Fairchild airplanes, but the German manufacturer’s recent bankruptcy has thrown a veil of uncertainty over those plans.
Of course, Great Plains’ qualifications or the guarantees remain far from certain as well. The ATSB rejected Frontier Flying Service’s application for a $7.2 million guarantee in part because the airline “did not provide a reasonable assurance” that it could repay the loan. The board also cited Frontier’s ability to secure insurance coverage “at reasonable rates.” The airline previously named lack of affordable insurance as a basis for its application.