SkyMall Seeks Bankruptcy Protection
Raymond Legaspi | | Jan 26, 2015 10:37 AM EST |
Struggling in-flight seller SkyMall has filed for bankruptcy protection, after sales plummeted due to competition for passengers' attention from tablets and mobiles that are now allowed to be turned on before and during a flight.
The business owner, SkyMall LLC, has asked a bankruptcy court to take over the disposal of its assets, based on papers filed on Thursday last week with a Phoenix court. The parent company of SkyMall, Xhibit Corp., is also seeking Chapter 11 protection.
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The company has been selling oddities and quirky items such as a garden statue of Bigfoot and bacon jam through an in-flight catalog in the last two and half decades. The catalog is often tucked into the seat pockets on local flights, but airlines are starting to do away with the sales publication.
Delta Air Lines ended business with SkyMall in November while Southwest Airlines told the seller in December that it would no longer carry the catalog this year.
SkyMall acting chief executive Scott Wiley expressed disappointment in the company's fate but he hoped the popular 'SkyMall' brand would find a place to operate.
The business has stopped its offering retail catalog sales on January 16 while 47 of the company's 137 employees lost their jobs, reports said quoting court papers.
The company's chief executive said, with the rising use of electronic gadgets on flights, fewer passengers thumbed through the SkyMall in-flight catalog. He added Internet access during flights is the final straw, which worsened SkyMall's dwindling catalog sales.
Two years ago, SkyMall reported it made around $33.7 million from its retailing business but posted only $15.8 million in the first nine months of last year.
In the company's bankruptcy petition, it listed assets worth between $1 million and $10 million and reported in court papers that its total liabilities are around $12 million. The retailer named American Airlines, Delta Air Lines and US Airways as its biggest unsecured creditors.
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