A bankruptcy court judge has ordered Direct Air's assets to be sold, the final blow for the grounded carrier that had served the Niagara Falls International Airport.
Judge Melvin Hoffman, at the request of the U.S. Trustee overseeing the case, approved converting Direct Air's case to Chapter 7, which calls for liquidation. The carrier had opposed the switch, hoping to maintain its case as a Chapter 11 so it could reorganize and eventually resume flying.
In March, South Carolina-based Direct Air angered passengers by abruptly canceling flights, stranding some customers and upending other ticket holders' future travel plans. Its bankruptcy filing followed soon after.
The U.S. Trustee in the bankruptcy case, which is being heard in Massachusetts, had cast doubt on the airline's ability to successfully reorganize, noting Direct Air was continuing to incur costs after its bankruptcy filing.
Federal officials are also investigating money missing from an escrow account in which Direct Air was required to deposit fares until completing its flights.
Direct Air began serving the Niagara Falls airport in 2007. Another carrier, Allegiant Air, has announced it will add flights in June to Punta Gorda, Fla., from Niagara Falls, filling part of the service void created by Direct Air's shutdown.
Bankruptcy court documents show Direct Air owed about $91,000 to the Niagara Frontier Transportation Authority, which runs the Niagara Falls airport, and $49,000 to WUTV-Fox 29 in Buffalo.