Mainline Air customers
still waiting for refundsLegal action has frozen bank
accounts, the defunct business says
Defunct Mainline Airways says it has made all the refund payments it can make for now, leaving more than half of its customers waiting for their money, because legal action against it has frozen its bank accounts.
Mainline Chief Executive Officer Luke R. Thompson told customers in an e-mail that 73 of them, out of a total of 124, will have to wait for refunds because legal action by the Massachusetts attorney general's office has stopped his bank accounts.
But a Massachusetts attorney general's spokeswoman said yesterday that the state's restraining order against Mainline and Thompson does not prevent him from making refunds. It only stops him from using the accounts for purposes other than refunds, said Sarah Nathan.
Thompson said in his customer e-mail that whatever the injunction itself said, his banks decided to "play it safe" and shut down the accounts completely. Mainline's credit-card merchant account did the same thing, Thompson said.
He listed 73 "reservation numbers" that will have to wait for refunds. People who weren't on the list, 51 in all, have already been repaid, Thompson said. There was no way to verify that yesterday, but several Hawaii residents have said they received full refunds. Thompson closed the business June 10 said he had taken about 120 reservations.
Thompson maintains he did nothing illegal in taking credit-card payments for seats on Los Angeles-Honolulu flights sold for as little as $89. Judges in Massachusetts and Hawaii did not agree.
Both states issued orders telling him to stop selling tickets.
State and federal authorities said Mainline should not have been selling tickets because it had no aircraft and none of the permits required to get into the airline business. Thompson, who turned out to have been an 18-year old college student when he set up the Mainline Airways Web site in April, maintained he did not need those permits because he planned to contract with a charter airline to carry his passengers.
A Hawaii Circuit Court hearing July 9 will give Thompson a chance to appear in court or send an attorney. If he does neither, Circuit Judge Eden Elizabeth Hifo has said she will issue a permanent injunction against Mainline doing any business.
The state attorney handling the case, Michael Moriyama, was unavailable for comment yesterday.