Letter to Ray LaHood, Secretary of Transportation - Direct Air Bankruptcy and Cancelled Flights

Letter

Representatives Brian Higgins (NY-27) and Kathy Hochul (NY-26) are looking for answers following the abrupt cancellation of flights by Direct Air and the subsequent bankruptcy filing by the company. Last week, a U.S. Bankruptcy Court judge ruled that the company be liquidated under a Chapter 7 filing. According to published reports, proceedings shed light on an alleged shortfall in the escrow account required by the U.S. Department of Transportation (USDOT) intended to hold ticket buyer's funds. The Western New York Representatives are asking for an investigation and calling for a clear path to consumer refunds.

"There are serious questions that need to be answered about where the money paid by consumers to Direct Air is and how passengers can go about getting the refunds they deserve," said Higgins. "The Company's sudden stoppage of flights wreaked havoc on family travel plans for hundreds of Western New Yorkers and now some are made to jump through hoops with no clear answer on how to receive refunds."

"I have serious concerns about Direct Air's business practices and their ability to follow through on the promises made to hundreds of Western New York families," said Congresswoman Hochul. "We must ensure that escrow accounts were properly maintained and that all customers will be reimbursed for cancelled flights."

April 17, 2012

The Honorable Ray LaHood
Secretary of Transportation
1200 New Jersey Avenue SE
Washington, D.C. 20590

Re: Direct Air

Dear Secretary LaHood,

We write you today regarding the thousands of Western New Yorkers that are each out hundreds of dollars due to the malfeasance of Direct Air. We urge you to act swiftly to investigate the airline's activities that led to an abrupt and indefinite cancellation of service and clarify a pathway for refunds for customers who have not yet been made whole.

Direct Air first began flights between Niagara Falls International Airport and destinations in Florida and South Carolina in 2008. At the time, Direct Air was seen as a boon to the long underutilized airport which has recently undergone extensive renovations. Direct Air was seen as an affordable option for travelers both into and out of the region.

As you know, that service abruptly came to a halt in March amid claims that the airline was in serious financial trouble. Many customers have been left high and dry without any easy recourse to get a refund for flights that were cancelled, some with no notice. On top of this being a customer service nightmare, claims that Direct Air did not hold customer funds in an escrow account as directed by the Department of Transportation raises serious legal concerns.

As the regulator of charter air carriers and the arbiter for these complicated regulatory issues, we urge you to carry out a swift and comprehensive investigation of how this situation was able to occur and, most importantly, provide a pathway for Western New Yorkers to receive full refunds for cancelled flights.

We look forward to working with you on this issue.

Sincerely,

_________________ _________________
BRIAN HIGGINS KATHLEEN HOCHUL
Member of Congress Member of Congress

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