By: Tom Corrigan
The company behind the in-flight catalog SkyMall filed for Chapter 11 bankruptcy protection Thursday, a victim of evolving rules and technology that now lets airline passengers keep their smartphones and tablets powered up during flight.
SkyMall LLC, its parent company Xhibit Corp., and several other affiliates are seeking a bankruptcy-court supervised sale of their assets, according to papers filed with the U.S. Bankruptcy Court in Phoenix.
In court papers, acting Chief Executive Scott Wiley cited a “crowded, rapidly evolving and intensely competitive” retail environment as the reason for the quarterly publication’s recent nosedive.
Quirky gadgets like this are what made Skymall a hit with readers. (Photo: Skymall)
“With the increased use of electronic devices on planes, fewer people browsed the SkyMall in-flight catalog,” Mr. Wiley said.
The increase in the number of airlines providing Internet access “resulted in additional competition from e-commerce retailers and additional competition for the attention of passengers, all of which further negatively impacted SkyMall’s catalog sales,” he added.
The SkyMall business had revenue of about $33.7 million in 2013, but only $15.8 million for the nine months ended September 28, 2014.
SkyMall filed to preserve their assets by seeking “to achieve a sale of their assets and complete an orderly wind-down of their affairs,” said Mr. Wiley.
The company doesn’t have a buyer lined up, but Mr. Wiley said SkyMall is hoping to sell its business as a going concern and will attempt to “sustain their scaled-down business operations as a going concern” during the sale process.
An auction will be held on or about March 24, Mr. Wiley said, and any sale of SkyMall’s assets will close in April.
SkyMall, whose catalog can be found in the seat pockets on many domestic flights, named Delta Air Lines , American Airlines and US Airways as its largest unsecured creditors, court papers show.
In its bankruptcy petition, the company listed assets between $1 million and $10 million and liabilities ranging from $10 million to $50 million.