Eos Files Bankruptcy; Will Cease Operations

Eos Airlines has filed for bankruptcy in the U.S. Bankruptcy Court in the Southern District of New York and has ceased operations altogether as of yesterday, April 27. The premium-class airline, which operated from New York to London, blamed the difficulty in the current credit markets for the shutdown, which eliminates most of the positions at the Purchase, NY-based company.

Jack Williams, Eos’ CEO, said in a statement: “After overcoming today’s extremely challenging economic and credit environment to negotiate terms for a round of financing, it is regrettable that we were forced to take this action.  We had been clear since closing on our last round of financing that we would need additional capital.  As difficult as it is to raise funds in the current environment, investors believe in our business model and we were on the verge of success.

“Unfortunately, just as we were working toward closing on an investment that would have carried us to corporate profitability in 2009, some issues arose that we could not overcome.  It is regrettable that, even though investors continue to be enthusiastic about our business model, and even though we had a term sheet in hand, we were unable to close on the financing we needed.  That leaves us with insufficient cash on hand to continue operations.”

On its website, Eos said its customers should seek alternative arrangements for travel and should contact their credit card companies or travel agents directly for information about how to obtain a refund for unused tickets. Members of its Club 48 loyalty club were also advised that they would be able to redeem their points for rewards and that any value related to their membership will be determined by the court as part of the bankruptcy process.

Eos said that customers and suppliers who need more information should visit www.eosclass.com. Court filings and claims information will be available at http://kccllc.net/eosairlines.

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