Vanguard Shuts Down, Files Chapter 11

Vanguard Airlines Inc. filed for Chapter 11 bankruptcy amid a liquidity crunch that forced the low-cost airline to shut down operations and fire about 1,000 employees.

The Kansas City-based based carrier said it continued to seek funds in order to resume operations, but Chief Executive Scott Dickson said the company’s shutdown probably would be permanent.

Vanguard’s decision came after the Air Transportation Stabilization Board rejected the airline’s fourth request for a government-backed loan guarantee and talks with a private lender ended without success.

Aviation officials and a skeleton staff of Vanguard employees worked to help stranded passengers find flights on other airlines.

Vanguard is the third small U.S. airline to lapse into bankruptcy after the Sept. 11 terrorist attacks.

The company’s shares fell 80%, or $1, to 25 cents in over-the-counter trading.