Regional airline files for bankruptcy, cancels flights after fatal crash | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Among some of the airlines that filed for bankruptcy in the first half of 2025 are Spirit Airlines (SAVE) and Silver Airways but also Azul Linhas Aereas (AZUL) in Brazil and Romania’s Blue Air — amid the extremely high costs that the world of aviation commands, many carriers struggled to both to bring in necessary traffic and navigate tense political situations that suddenly disrupted flight schedules the airline spent months planning.

On November 13 2021, a twin-engine Britten-Norman BN-2A charter plane operated by Island Airways crashed when headed over to Michigan’s Beaver Island in a fatal accident that killed four people.

The 11-year-old daughter of one of the killed passengers was the lone survivor while later investigation found that the pilot accelerated too quickly and accidentally caused the plane to stall and then spin straight into the coastline.

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Airline never recovered from fatal crash, president says

The crash caused an enormous hit to the reputation around parent company McPhillips Flying Service, which operated as both Island Airways and Welke Aviation. On July 17, McPhillips Flying Service filed for Chapter 11 bankruptcy protection in what President Angela LeFevre-Welke said was related to the ensuing negligence lawsuit filed after the crash.

The National Transportation Board report released two years after the crash found that “the pilot exceeded the airplane’s critical angle of attack during final approach, which resulted in an aerodynamic stall and loss of control at an altitude too low to recover.”

The largest island in Lake Michigan and the third-largest in the state, Beaver Island sits approximately 32 miles off the coast of Michigan and serves mostly as a tourist destination with a population of just 604 permanent residents.

Launched in 1945 as McPhillips Flying Service and later merging with Welke Aviation in the 1960s, Island Airways was the only carrier serving the rural island with a connection to the closest city of Charlevoix. A round-trip ticket between the two destinations is currently listed as $152 for an adult and $98 for a child.

‘An aircraft that meets your needs,’ airline once said

“Whether you want to ship freight, book a charter flight, or enjoy a weekend vacation on Beaver Island, we have an aircraft that meets your needs,” Island Airways says on its website.

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Requesting Chapter 11 protection under Section V of the U.S. Bankruptcy Code for the Western District of Michigan, the bankruptcy filing states that the airline needs support to continue providing transportation between the regional communities — a bankruptcy trustee will presumably be assigned to determine future steps and whether the airline has a chance to find investors to take on its crippled finances rather than needing to head straight into liquidation.

Due to its large size and number of small islands around the coastline, Michigan has a high number of charter airlines operating in the state as well as spread-out communities that rely on their services.

“The first air passenger to Beaver Island was a Doctor providing medical services,” the airline writes of its history on its website. “The Beaver Island-Charlevoix Airmail route was also one of the first in the country.”