National Airlines out of business!

[updated:LAST EDITED ON 07-11-02 AT 09:28 AM (GMT)]another one bites the dust…very thaughtful way of announcing of ceasing operations.
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The letter sent to all employees….

November 6, 2002

To All Employees:
National To Cease Operations

It is with a very heavy heart that I inform you that National Airlines will cease operations this evening. We have exhausted every viable alternative in seeking additional financing that would have allowed National to successfully reorganize. Despite the Company’s operational progress during our reorganization and a business plan that we believed would be successful in the new operating environment, potential investors and creditors willing to take on risk in today’s airline environment could not be found.

This is, no doubt, as difficult a situation as many of you have ever faced. While I personally am having all of the same emotions you are feeling, it is my duty to also try and provide you with information that may help to answer some of your questions you have about what happens now.

Operations

The Company will not operate any flights out of Las Vegas after 4:30 p.m. Pacific today. Flights departing field stations will continue until such time as all aircraft have returned to Las Vegas, where they will be parked. Aircraft will be ferried back to Las Vegas, and we will make every attempt to contact flight crews so that they may get on the ferried flights. Employees who are pass traveling may also catch these ferried flights. Individuals from flight crews who miss the flights will need to work with Crew Scheduling and the Pass Bureau to make arrangements to return to Las Vegas.

Customers with tickets on National Airlines that were purchased with MasterCard or VISA credit cards may apply for a refund through their credit card company. Customers using other credit cards must inquire at their respective credit card companies about refunds. Customers holding tickets for future National Airlines’ flights should be able to fly on other carriers based on those respective carriers’ acceptance program as outlined by Section 145 of the Aviation and Transportation Security Act. Use of National Airlines tickets on other carriers may affect customers’ refund requests with their respective credit card companies. Refunds for tickets from National Airlines will not be available.

Employment

Employees in the operation will continue their employment with National until the completion of their shift, or until the operation as it affects an employee’s specific duties is completed, whichever is applicable first.

Most administrative employment will be discontinued effective Wednesday, November 6th. Employees will be notified via the Company’s intranet site (thenationalnet.com) as to the days and times employees will be permitted to return and gather their personal effects.

A small staff will be required to continue to work in order to shut down the Company. This work will include such items as processing paychecks to all employees for all time worked, shutting down the various parts of the operation, contacting vendors and suppliers to cancel all contracts and obligations, etc.

To assist with future employment, the Company will also mail employment verification letters to all employees.

Paychecks

The Company has set aside funds for payroll in order to pay employees for time worked through today, including estimated overtime and incentive pay. Direct deposit will not be available for the final paychecks. All employees will be mailed their paychecks. All mailings will be sent to the last known address (check your most recent paycheck to verify your address). Unused vacation time will not be paid. All W-2s will be mailed to each employee’s last known address.

Employee Benefits

All employee benefits will cease immediately. Medical insurance via COBRA is not an option due to the requirement that the Company be operating. All medical claims that have not already been paid for via the insurance will also not be covered. You can contact Great West Life & Annuity Health Plan (Plan #357512) at 1-800-338-4015 to verify the status of individual claims.

Your 401(k) account will remain open, and your money is accessible only by you – not the Company or the Trustee. Additional contact information for 401(k) participants will be posted at nationalairlines.com. The Flexible Benefits Account has been funded with year-to-date employee contributions for participating employees, and those funds remain accessible through the normal claims process.

Security Items

It is very important that all employees return both their National Airlines badge, airport badges, and uniforms. Return of these items is required under federal law and non-compliance will result in the Company having to notify the proper federal agencies. When and how these items (uniforms, work equipment such as laptops, company badges, airport badges, etc.) should be returned will be communicated to all through The National Net.

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Most of us will now have to deal with a situation that we have never faced before. There will be many questions and situations that arise over the next few hours and days that will test us as professionals and individuals. I trust that each of you will conduct yourselves with the same professionalism that you have demonstrated throughout your time with National. I also urge all employees to work with each other to help everyone get through this very difficult time, whether it be with assisting a fellow employee dealing with customers or vendors, emotional support, or any other form. Please note that the Employee Assistance Program (EAP) remains available for a limited time. Employees may contact the EAP at 1-800-272-7255.

There is very little I can say that would be of comfort to anyone. I would, however, like to say that you have been the best group of employees I have ever had the pleasure of being associated. Airlines will come and go, but I will always believe that with the funding we were seeking, National Airlines had the opportunity to be the best. Unfortunately for all of us, things didn’t work out that way.

I cannot begin to express my gratitude to everyone who believed in what we were trying to accomplish at National Airlines. Your efforts are what made our Company be recognized as one of the nation’s top airlines in customer service. I sincerely hope that one day each of us will be able to reflect on our time with National knowing that we did our best under the circumstances.

Sincerely,

Michael J. Conway
Chairman of the Board
President and CEO
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