Bankruptcy: Silver Airways Could Leave Big Florida Void

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?