Last week Silver Airways filed for Chapter 11 Bankruptcy protection, but if the carrier goes away, it could leave a big void in the Florida market.
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Silver Airways Files Chapter 11 Bankruptcy Protection
To start the year off on the wrong foot, Silver Airways announced it was filing for Chapter 11 bankruptcy protection, allowing the company to restructure its $500MM debt load.
“This decision will allow us to secure additional capital and undertake a financial restructuring that will strengthen our position as a competitive airline, ultimately benefiting you — our valued customers,” Silver Airways said in a statement about the bankruptcy. “We anticipate completing this process by the first quarter of 2025, emerging stronger and ready to continue serving you with the same dedication we’ve upheld for over 13 years.” – The Street
The boldly (and oddly) pink carrier operates a fleet of ATR-72 (6) and ATR-400 (8) prop aircraft primarily flying between smaller markets throughout the state of Florida, Puerto Rico, the US Virgin Islands, and the Caribbean.
Reorganization will allow the carrier to work with creditors to find a more manageable path forward, and break commitments that are untenable. The Silver Airways bankruptcy was filed on December 30th, 2024 to close the year.
Why Silver Airways Is Important In Florida
Silver is an unusual carrier in its operation of all prop aircraft, short haul markets, and a tight network around Florida. It receives more than $20MM annually in Essential Air Service Contracts from the US government to operate routes that would otherwise be impossible due to financial constraints but are essential to local economies.
But Florida has a few other unique characteristics that not only make Silver Airways (or a an airline like it) important, but key to the development of the state.
Small Overwater Markets
With Fort Lauderdale serving as its base for the Bahamas (though not exclusively) and San Juan, Puerto Rico for its Caribbean network, these communities need air travel to avoid lengthy ferries. For example, a 2 hour and 10 minute ferry ($70 each way) from St. Croix to St. Thomas is just 25 minutes by air.
From its Puerto Rico hub, many of the island nations utilize San Juan as the hub of the Caribbean and connect the US economy to the rest of the market.
Huge Population And Tourists
Florida has the third highest population in the United States behind just California and Texas and ahead of New York. There’s 22.6MM residents making their way around the state for business, family, and in-state tourism. Additionally, some 140MM tourists visit the state every year and it’s not just Miami and Orlando.
There’s a lot of folks to move around without solely focusing on traffic in and out of the state or to or from Orlando. With 46-seat and 70-seat aircraft with a large population center and several busy markets that are between the major dots, it’s surprising Silver wasn’t able to make it work.
Long By Road, Short By Air
Florida’s unique geography makes some short distances by air a very large challenge by car. Tampa to Key West, for example is just 241 miles or a 57 minute flight. By car, travelers need to either cross the state first then drive south to Miami and down to the archipelago or drive three hours south to Naples, two hours east across Alligator Alley, and then south past Miami on a 7 hour and 41 minute journey spanning a minimum of 427 miles.
Orlando to Key West is an hour closer by car and nearly the same flight time. Pensacola in the panhandle is more than six hours by car from Orlando, but just a quick hour long flight. And to give a little example of just how incredibly far some distances in the state can be by car, Pensacola to Key West is more than a 12 hour and 32 minute drive, but for perspective, Key West to Charlotte is only slightly more at 13 hours vs a 90-minute flight.
Who Fills The Void If Silver Doesn’t Emerge?
If Silver Airways fails to emerge from bankruptcy, Spirit could catch a rare break and pick up some of the Bahamas traffic or increase frequencies. JetBlue could likewise fill some gaps as could American for the San Juan traffic either through American Eagle or Republic. Breeze could pick up some routes too but they seemed to be more focused on long haul A220 flights at the moment.
If Silver Couldn’t Make It, Who Can?
The EAS money could help a smaller carrier who can’t otherwise make it work, very small regional carriers Southern Air (in Pittsburgh), or Contour could try to make it work. It’s possible that Contour is better positioned given it flies Embraer 135/145 aircraft and these are widely available on the secondary market in case it wanted to expand. Bahamas Air could also step in for some segments in the Bahamas network it doesn’t already serve, but will likely need to lease some equipment to get it done.
But some of Silver’s less profitable routes would ultimately die stranding islands with fewer if any air routes to the US market.
Conclusion
With $500MM in debt to restructure, it’s a tall task to keep Silver Airways flying but it’s possible the team and courts find a way. Florida is a large market (as is the Caribbean) and the geography and population/tourist centers need Silver’s service or a similar operation. Whether another carrier could make the short distance operations work remains to be seen.
What do you think? Will Silver Airways emerge from Bankruptcy? Will another carrier (or carriers) fill its shoes?
Hope Silver makes it but their prices are high for what you get. I fly often from TPA to EYW (Key West) through Miami much cheaper than Silver’s direct flight. Hate the time difference but Silver shouldn’t be asking $400-$500 RT for a 40 minute flight
Also there was multiple reports of Silver not paying airports for their slots, I wonder how that is addressed with the bankruptcy filing? And are the airports left holding the bag, out the funds?
They’re filing ch 11, not ch 7. There’s no risk of them not emerging. Their flights will continue as normal, as will their partnership with B6 and UA.
I would image they were banking on the subcontracting airfreight service for Amazon like Sun Country currently does. Such a contract provides steady revenue. However, Amazon cancelled the Silver contract after only 18 months.
In an alternate scenario, would be a good fit for JetBlue.
B6 just upgraded SJU as a crew base (pilots & FAs) while SJU is Silver’s number two airport. Also, FLL is B6’s number 3 airport and the hub for Silver. Thinking of the box, Silver could also provide commuter service out of NYC and BOS freeing up jets for longer distances. The new name would be JetBlue Express or JBExpress. However, you would have to keep the pink flamingo as part of the new paint job.
Forget Florida. There’s enough money and people there for someone to step into the fold. American flies Tampa to Miami. I know Delta flies Miami to Orlando. I think Delta has talked about Miami to Tampa. American flies Miami to Key West. The hardest hit will be the U.S. Virgin Islands. The 40,000 people on St. Croix and the 40,000 people on St. Thomas are wholly dependent upon intra-territory flights. Sometimes there is one flight an hour on a sea plane between St. Croix and St. Thomas. There are also several fixed-wing flights each day.
Just tax the rich to save the airline. 90 percent incone tax, yes
What void? I didn’t realize that anyone willing flies on Silver other than the unsuspecting few who were suckered into it via a codeshare that they didn’t notice. A 1982 Yugo is more reliable then them and you can usually drive and still arrive there ahead of the plane when the almost certain 4+ hour delay is factored in.
I’ve flown Silver quite a bit, and their biggest intra-Florida issue is on time performance.
For a 1.5 hour flight to be the clear winner vs a 7 hour drive (to use TLH-FLL as an example) you must operate on time. If we assume a half hour ride to/from the airport on each end, showing up to airport 1.5 hours early, and a 1.5 hour flight time, that’s a total transit time of 4 hours, saving you three hours vs driving as a best case scenario.
It’s nice when it works, but Silver is quite often severely delayed. When you figure in the added stresses inherent to commercial air travel, and the fact that you don’t have a car at your destination if you fly, Silver is still up against a lot even when running on time.
I think their best bet is to cut down to only island hopper flights on routes having no competition (to include ferries). That and whatever EAS they can run at a profit.
Silver doesn’t have any EAS contracts and has not in years. Not since before they retired the Saab 340s.
Sell a couple of aircraft to reduce debt, Improve operational reliability. Dedicate 2 aircraft to New England in summer ferrying passengers from southern Maine, Nantucket and M.V. through PVD.
ATRs do not have the range to fly from New England to Florida.
There is not an airline anywhere that has worse online reviews over an extended period of time. Is it any wonder they have financial problems.
Not sure where you’re getting your info….
Silver Airways does not hold any EAS contracts presently. They get ZERO EAS dollars.
Yeah, that was my thought, too.
Silver may fly between some “in demand” places and locations where the road distance is long, but they don’t do a very good job of it at all. Their reliability is poor. They drop routes sometimes with 2-3 days notice. If you look at the list of creditors, they owe a ton of money to their key airport locations. FLL and TPA have both threatened to evict them in the last year. They recently left GSO, BNA, and HSV all owing the airport and ground handlers significant money… and stopped service with a couple days notice.
Looking at data from a peak month in 2024, their HIGHEST load factor route is between PNS and TPA at 78% (for reference, the highest 10 load factor Breeze routes are all over 85%, Allegiant’s top 10 are over 96%, and Delta/American are all over 95%). Their 4th highest load factor – one that you highlight as saving time versus driving – only pulls 63% TPA-EYW and that’s in peak. MCO-EYW is below 55%. EWR-FLL? 39%.
I flew Silver three weeks ago from FLL to Tallahassee… 4 of us on the plane. I paid $49 after a promo coupon.