Closing books on Direct Air raises more questions

MYRTLE BEACH (WMBF) - Unexpected, tragic, unforgivable. These are some of the words airline passengers used to describe the collapse of Direct Air back in April of this year.

Without notice the airline fired it's employees, returned its leased planes and left tens of thousands of passengers with no tickets and no apologies.

It's been an ongoing battle to close the books on Direct Air and an even bigger battle to finally get Myrtle Beach the kind of air service that local passengers can rely on.

It's been six months now since Direct Air left thousands of our locals and vacationers holding worthless tickets. Six months since federal investigators first learned the airline was flat broke, and had been months before it went belly up.

And the truth is none of Direct Air creditors have seen a dime. Maybe they never will.

For stranded Direct Air passengers the sky really was falling. But after the initial shock of being stranded, forced to re-book or go to battle with the credit card companies, nearly 90 percent did get their refund.

Attorney, Joe Baldiga is the federal trustee handling the Direct Air bankruptcy filing.

"Most of the passengers to the extent that they paid with a credit card or debit card have received all of their money back because they did charge backs through their credit card companies," Baldiga assures.

So, adding to creditors like fuel companies, food vendors, air craft leasing companies and of course airports like Myrtle Beach International, credit card companies are in the hole nearly $30 million dollars thanks to this once celebrated, "local" airline.

Here's what happened. Direct Air operators were supposed to have that $30 million sitting in an escrow account.

When you buy a plane ticket, the airline can't touch that money until your actual flight is complete. That money goes into the escrow account. That account should have been bulging with $30 million. However, when trustees finally saw the account, there was only about a million in it. That's a huge violation of federal law.

"That money was supposed to be in that account to protect passengers in case what happened is exactly what happened," admits Baldiga.

Direct Air booked flights six months in advance, through the end of this month, in fact. Tens of thousands of passengers bought tickets. And while Myrtle Beach has become accustomed to on again off again air service, Direct Air really did hit us where it hurt the most.

"The timing couldn't have been worse as it was right on the cusp of the new tour is, season," says Myrtle beach Chamber of Commerce President, Brad Dean. "Too late to get a new airline."

So, is this our destiny? Can we ever rely on airline service for a market like ours that doesn't come with the threat of cancellation, or worse? Many passengers have less than high expectations.

Craig Rosenbloom is flying back to California. "It would have been a lot easier to have more direct flights, not have to fly out of the way just to come down here."

"We do get direct flights but then at certain times they discontinue the direct flights," says Detroit visitor, Gayle Stahl.

Despite the perception, Myrtle Beach International handles the kind of passenger loads that would make any similar sized market green with envy.

"We have 24 non-stop destinations," says Airport Director, Mike Lapier. "For a market this size, in this economy, at this time, that's unheard of."

Yet all is not perfect here in Myrtle Beach. No new carrier has replaced Direct Air and all the seats they took with them. Even the most reliable carriers here follow the tourists, meaning lots of flights during the spring and summer and then big cuts during the off season.

"What we would love to have is the ability to flatten our curve and that means the ability to bring passengers and air service here on a more year round basis," say Lapier.

The limited seats also mean a limited number of cheap seats. It's not uncommon to hear people complain about the high cost of flying out of here. It's why so many drive to places like Charleston to catch a flight. Smart? Airline analysts says those travelers just haven't figured out the system yet.

"We're the cheapest in the area," says Lapier. "You just have to work a little sooner and a little harder to find it."

So, let's do a little advanced planning and comparing, Myrtle Beach to Chicago vs. Charleston to Chicago round trip on January 19.

Sure enough, planning does pay off. The same was true when WMBF News checked flights to LAX. We've got the cheaper seats. You've just got to snatch 'em up quick.

Even so, reliable, quality air service is a critical when it comes to improving the local job market, convincing people and businesses to relocate here. And that's where Myrtle Beach has a long way to go.

"Offering direct or convenient service throughout the us and beyond is a key decision maker for many industries looking to expand or grow in a new market like the myrtle beach area," says Dean. "Often times that's a deal maker or deal breaker if you don't have it."

Truth is we here in Myrtle Beach are in somewhat of a 'Catch 22'. We want more passenger seats flying in and out of the area to help bring in new development and a larger population. The airlines needs more development and a larger population to justify bringing in more seats. This doesn't mean we'll never see things really picking up here. It just means the process will continue to be a slow one.

On the issue of Direct Air, there are still hundreds of paying passengers who were left holding tickets for flights that never left the ground. If you're one on them, the deadline for filing a claim with the bankruptcy trustee has just been extended to January 15, 2013.

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