bankruptcy

S.P.I.A. files on bankruptcy

George Wray’s South Pacific Island Airways has filed for Chapter 11 protection under the U.S. Federal bankruptcy laws, saying it has US $33,000 on deposit and debts totalling US $6.5 million. It hopes to continue operating and pay off its creditors but is still battling with the U.S. Federal Aviation Administration over the noise abatement equipment needed for its Boeing 707 aircraft.

SPIA, which won internatio nal news prominence by being found somewhat off track last

year and in Soviet air space during a trooping flight with Fiji infantrymen bound for the Sinai and Lebanon, has been banned from U.S. domestic airports because its four Boeing 707 airliners do not meet the latest F.A.A. noise limitation requirements. F.A.A. officials had issued an exemption certifi cate to SPIA, giving them time to fit ’’hush kits” to their elderly Boeings, but revoked it on June 9, thereby effectively restoring the ban. The F.A.A. said SPIA had failed to act in good faith in

acquiring ’’hush kits.” SPIA re sponded by making another application for a waiver while their current problems, mainly financial, were sorted out, but this was denied.

Meantime the airline has con tinued to operate charters away from U.S. controlled airports.

The one exception to this was a charter arranged for 150 passengers stranded in Tahiti whom SPIA was allowed to fly to Honolulu. This was arranged after Hawaii Congressman Cecil Heftel was contacted by a Honolulu resident complaining he and the others had been stranded in Papeete by the ban and were unable to make alternative arrangements to get home.

The F.A.A. ban has resulted in the layoff of about 150 SPIA

employees. Reports from the U.S. say that adequate quieten ing of the SPIA Boeings’ en gines would cost around US $2 million per aircraft and that, say industry pundits, is probably more than the aircraft are worth in the marketplace.

Yet, SPIA provided service to a number of otherwise remote Pacific islands and might have filled some of the gap left by Air Nauru’s withdrawal of many of its services because of financial strictures.

At the same time, some new regional services are being pro vided by the recently-formed Samoa Airlines, which is also operating a Boeing 707 be tween Samoa and Honolulu, among other points in the northern part of the Pacific.