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Hawaii’s Island Air, which flew to remote destinations throughout the state, is shutting down, WSJ Pro Bankruptcy reported. The financially troubled airline said it would end service after nearly 40 years once its final flights land on Friday, according to the carrier’s website. The Honolulu-based airline brought passengers to the islands of Oahu, Maui, Kauai and Hawaii on more than 200 weekly flights. Hawaiian Airlines, the island’s largest carrier, is offering discount flights to stranded Island Air passengers and said that it would begin flying some of them on standby for free starting on Saturday. In an effort to save the business, Island Air officials put its operations into bankruptcy on Oct. 16, preventing the owner of three leased Bombardier airplanes from taking them back. Airline officials had been negotiating a repayment deal with plane owner Wells Fargo Bank N.A., which said the airline had failed to pay nearly $5 million in rent and fees.

The owners of Dynamic International Airways LLC have agreed to loan their charter airline another $2.5 million as the company prepares to file a chapter 11 plan, the Wall Street Journal reported today. The loan, which must be approved by a judge, would be provided by lender Solitude Strategies LLC, a company co-owned by Kenneth Woolley and Paul Kraus who acquired the charter airline in 2013, according to papers filed on Monday in the U.S. Bankruptcy Court in Greensboro N.C. Dynamic canceled two flight contracts earlier this month, prompting the need for additional financing, the company said in court papers. Dynamic is seeking authority to immediately draw as much as $1.5 million, with an option to draw another $1 million in December, if necessary. The company also said in court papers that it expects to file a chapter 11 plan by Friday and a disclosure statement describing the terms of the plan next week. The company said it has faced challenges recently because some of its aircraft have been grounded, though it anticipates they will return to service in the next two weeks.

Hawaii’s Island Air, a small regional carrier that shuttles passengers across the state, filed for bankruptcy on Monday, the Wall Street Journal reported today. The airline sought chapter 11 protection in the U.S. Bankruptcy Court in Honolulu, beset by legal trouble that threatened to ground its aircraft. The company listed both total assets and liabilities as between $10 million and $50 million. Island Air was founded in 1980 as Princeville Airways, according to its website. Oracle Corp. founder Larry Ellison acquired the business in 2013 but sold a controlling stake in the airline three years later to two Honolulu-based investment funds. Island Air is seeking an emergency hearing in bankruptcy court as soon as Wednesday, court papers show, which it says is essential to ensuring its operations continue uninterrupted.

Bankruptcies, staffing problems and technical failures have affected tens of thousands of passengers and have caused tumult in the European airline industry in recent months, the New York Times reported yesterday. The problems fall into two categories: bad luck, and the result of the crowded nature of the European market. With flights sometimes as cheap as $15, an array of low-cost airlines has transformed travel in Europe. Travelers’ expectations of low prices have pushed the more traditional carriers to offer budget options, under which passengers pay for extras like food and checked luggage that previously would have been included. “Passengers have had a really good run for a long time with incredibly cheap tickets,” said Andrew Charlton, managing director of Aviation Advocacy, a consultancy. But, he added, “Europe’s got too many airlines.” The shakeout, along with other issues, has made for some tough travel in Europe. More than 100,000 passengers were stranded when Monarch collapsed into bankruptcy this month, forcing the British government to charter planes to get its citizens home. Air Berlin, another low-cost airline, filed for insolvency in August. Alitalia, the Italian flag carrier, filed for bankruptcy in May. Ryanair had to cancel thousands of flights in recent weeks because of staffing problems, including strikes in France that forced Ryanair and other airlines to cancel flights this week. The falling away of poorly performing airlines can be a positive: weeding out weaker, inefficient carriers, and portending much-needed consolidation. The U.S. has already been through a similar shake-up through mergers and takeovers; now, the six largest airline groups in the U.S. make up about 80 percent of flights in and out of the country. By contrast, the six largest in Europe have less than 50 percent of seats.

Monarch Airlines, a struggling British low-cost carrier and tour operator, collapsed into bankruptcy early Monday, ceasing its flights and forcing the government to step in and bring home more than 100,000 passengers stranded abroad, the New York Times reported. Britain’s aviation regulator called the collapse of Monarch the “biggest ever U.K. airline failure.” The airline is one of many that have struggled to grapple with Europe’s highly competitive airline market. Just this year, the Italian carrier Alitalia went into administration, which is similar to bankruptcy protection in the United States, and is currently seeking a buyer. Air Berlin, a German low-cost carrier, filed for insolvency and has put its assets up for sale. Ryanair, an Irish discount airline, has expressed interest in making a bid for Alitalia’s assets, but it has faced its own public backlash after it was forced to cancel more than 1,000 flights in September and October because of mistakes in its handling of vacation time for pilots. Last week, Ryanair said that it would cancel an additional 18,000 flights on 34 routes between November and March to avoid further cancellations.

Zetta Jet announced that the U.S. Bankruptcy Court for the Central District of California approved the U.S. Trustee’s and its joint request to appoint a chapter 11 trustee, the Aviation Tribune reported on Saturday. The company said that it took this action to ensure a unified direction in the Company’s restructuring efforts amidst continued shareholder disputes. The U.S. Trustee’s Office is expected to appoint the chapter 11 trustee shortly. The company also announced that to facilitate normal business operations, it has received court permission to pay a select group of critical vendors in the ordinary course of business for pre-petition debts owed. Zetta Jet also said that a recent emergency injunction ordered by a Singapore Court to stop the chapter 11 proceedings was null and void given that a Singapore Court has no jurisdiction in U.S. federal bankruptcy court.

New Orleans startup airline GLO Airlines will fly no longer. A federal bankruptcy judge has ordered the company to start the process of selling off everything it owns in order to pay its bills, NOLA.com reported yesterday. FlyGLO LLC, the airline's parent company, filed for bankruptcy protection in April, but executives assured flights would continue as it restructured and worked through a dispute with the firm that manages and operates its flights. The dispute boiled over the summer, with each side accusing the other of failing to uphold its side of their operation agreement. Court records show GLO told federal regulators on July 15 it was grounding all flights and ceasing operations. In August, the court appointed trustee overseeing the bankruptcy asked a judge to order the airline to start the process of selling its assets and distributing the proceeds to creditors, noting it had racked up more than $421,500 in unpaid bills in fewer than three months. Bankruptcy Judge Jerry Brown ordered the liquidation Sept. 1. As of Wednesday, GLO's website was still up, but its booking function was disabled.

Zetta Jet has committed to continuing operations of the luxury charter for Bombardier-built business jets as it attempts to restructure the company’s debt under chapter 11 protection and pursues a lawsuit against a former chief executive for allegedly misappropriating funds, FlightGlobal.com reported yesterday. Singapore-based Zetta Jet Pte and US subsidiary Zetta Jet USA each filed voluntary bankruptcy petitions under chapter 11 in  in Los Angeles on September 15, claiming liabilities in excess of $50 million, including liquidated contracts with Bombardier worth more than $15 million and unpaid bills of more than $4 million to engine supplier Rolls-Royce and World Fuel Services. The bankruptcy petition also shows that Zetta Jet claims more than $50 million in assets, including a fleet of seven Global Express classics and five Global 6000s. Zetta Jet’s order book also includes three Global Express and two Challenger 650s due for delivery in the fourth quarter this year.

Insolvent German airline Air Berlin said that it has received several offers for its assets which will now be assessed, Reuters reported today. Air Berlin, Germany’s second largest airline, filed for insolvency last month after major shareholder Etihad withdrew funding following years of losses. A final decision on buyers for the assets is due on Sept. 25, the day after Germany’s national election and four days later than previously planned.

Air Berlin was forced to cancel flights for a second day today after pilots again called in sick in unusually high numbers, potentially complicating efforts to rescue the insolvent carrier, Reuters reported. Air Berlin, Germany’s second-biggest airline, is set to be carved up, most likely among several buyers, with binding offers due this Friday. The airline filed for bankruptcy protection last month after its biggest shareholder, Etihad Airways, withdrew funding following years of losses. However, those losses are mounting as more plans are grounded. Air Berlin said that it had cancelled 32 flights today after around 150 pilots called in sick. On Tuesday, Air Berlin had scrapped about 100 flights. Some short-haul flights at Lufthansa’s budget airline Eurowings are also affected because it leases 33 planes with crews from Air Berlin. Air Berlin has already said the cancellations threatened its existence and could force it to shut down, jeopardising negotiations with potential investors and costing it several million euros a day.