Western Pacific Files For Chapter 11

Western Pacific Airlines, a 2-1/2-year-old start-up airline promoted as an aggressive, low-fare carrier to major cities, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court on Monday.

The airline will continue to fly and is actively negotiating a letter of intent for “debtor in possession” financing, Western Pacific CEO Robert A. Peiser said.

The airline’s filing stays creditors’ claims until it can reach an overall agreement with all of its creditors. The result is to allow Western Pacific to continue operating.

The airline, which inaugurated its schedule on May 30, 1995, with a flight from Colorado Springs to San Francisco, hopes the filing will allow uninterrupted service.

Four members of Western Pacific’s seven-member board of directors resigned abruptly last Friday, adding to the airline’s troubles.

WestPac reported a net loss of about $17 million in the April-to-June quarter this year, just prior to its shift of the bulk of its operation from Colorado Springs to DIA.