According to a press release from the airline's Web site, the filing came as a result of a dispute with its lender, CapitalSource Finance LLC, over whether "certain technical financial benchmarks were met." Officials from the airline would not elaborate on what those benchmarks were.

"This happened unbelievably quick," said Paul Landis, president and chief executive officer of Era Aviation. Landis stated in October that the airline was on solid financial ground with new investors, adding that the lender was so confident in the airline's performance that it assumed some of the company's debt during the transition to new ownership earlier in 2005.

Officials from CapitalSource would not comment on the issue.

In the course of a 10-minute meeting Dec. 27, Era Aviation Inc.'s board of directors voted to file for bankruptcy. According to minutes from the meeting, the special meeting was convened to "discuss the impact of the withdrawal of the Vintage Management Fund Equity Proposal ... and (the) next course of action to protect Era's interests." Landis would not comment on the nature of the equity proposal.

Also filing for Chapter 11 are Era's investors, which works under the name Era Aviation Investment Group LLC and includes former NFL football star Willie Gault as its managing partner. Actor John O'Hurley, and a Mr. Alan Hopkins are also listed in the investment group.

The filing, which Landis called "just a hiccup," may signal some big changes in the upcoming months. But change seems to be the culture at Era lately.

Era Aviation announced on July 1 that it was operating under the ownership of newly formed Era Aviation Investment Group.

The investor group purchased Era Aviation from Seacor Holdings. Seacor had purchased the airplane and helicopter operations earlier in 2005 from Rowan Drilling Co.

Era Aviation is currently funded by CapitalSource Finance of Chevy Chase, Md., for $14.5 million, and still owes Seacor a disputed $1.9 million.

Sources within the industry indicate that the airline was losing between $3 million to $4 million a year, a claim that Landis disputes.

"The fixed-wing (airplane) operation has not lost money," Landis said. "Any information that shows a loss must have included the rotor-wing (helicopter) operations."

Landis said the airline grossed $40 million for 2005, and that growth has been flat since 2002.

Era had a profit of $14 million in 2002, and losses of $5.4 million in 2003 and $27.6 million in 2004, including a $16 million after-tax loss on its sale, according to filings by its former owner, Rowan.

To cut costs, at the direction of Landis, the company dropped its defined benefit plan, switched to a 401(k) plan and chopped a few positions before SEACOR sold to the current owners.

Airport sources also indicate that Era Aviation, currently located at South Airpark Drive, had also looked at leasing the Reeve Aleutian hangar adjacent to the passenger terminal at Ted Stevens Anchorage International Airport. The airline currently leases hangar space from Era FBO LLC, which is owned by Seacor. Court filings showed that the airline owes Era FBO $772,663 for the lease and services.

Era's attorney Cabot Christensen said that a cash collateral hearing to determine the company's assets and available cash on hand was to be held on Jan. 4. Records showed that Era had cash reserves of $778,284 at the first of the year.

An Era press release and Landis indicated that, despite the Chapter 11 filing, Era would continue to fly its regular schedule and honor tickets.

Era Aviation is a code-share partner with Alaska Airlines that operates in the noncompetitive markets of Homer, Valdez, Cordova and Kodiak, and has regularly scheduled flights in Western Alaska.

Era Aviation, started in 1948, has 340 employees, operates three DeHavilland Dash 8 aircraft and has nine DeHavilland Twin Otter aircraft. The airline has operated passenger flights for the public for 22 years.

Rob Stapleton can be reached at