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Falcon Air Express, a Miami-based charter airline, has filed for Chapter 11 bankruptcy protection and laid off 73 of its 169 employees.

The airline will continue to fly with a reduced fleet as it works to reorganize, said Brian Rich, a bankruptcy lawyer for Berger Singerman, which represents Falcon Air.

Falcon Air was caught in a cycle of rising fuel prices and older, fuel-inefficient Boeing 727 aircraft that did not allow the airline to compete for bids -- and which required expensive maintenance checks, said Falcon Air owner and Chief Executive Emilio Dirube.

''I priced myself out of the market,'' he said.

In operation since 1996, the airline filed for bankruptcy late Wednesday night, listing $12.9 million in assets and $47 million in liabilities, as of Dec. 31, 2005. The company's largest creditors are leasing company Pegasus Aviation, owed $19.3 million; the U.S. Treasury, $7.1 million; RPK Capital Management, $1.3 million; and Miami-Dade Aviation Department, $1.3 million.

With a fleet of 12 aircraft at its peak, the airline has since returned the majority of its planes to lessors and laid off the 73 employees Wednesday, Dirube said.

Falcon Air, which also sub-contracts for Venezuelan carrier Aeropostal, will now fly with one remaining MD-82 and one MD-83 aircraft and hopes to lease three more MD-83s, Dirube said.

''The goal of the Chapter 11 is to allow the company to reorganize and refleet so that it has a uniform fleet of all the same aircraft,'' Rich said. ``And our goal is to file our reorganization plan very soon and hopefully emerge from Chapter 11 as soon as we can.''

The company won bankruptcy court approval Wednesday for $350,000 in interim financing from Jet Global to pay its payroll due Monday, he said.

Jet Global, Dirube said, has committed to $1 million in financing and to lease aircraft to Falcon Air. The company is affiliated with a major leasing company, BCI Aircraft Leasing of Chicago, as well as a repair station that has done business with Falcon Air for many years, he said.

''It's a win-win both for Falcon Air Express and the lessor,'' said Tim Sieber, vice president of the Boyd Group, an aviation consulting firm in Evergreen, Colo.

''Falcon Air Express gets cash to come out of bankruptcy and more fuel-efficient airplanes, and Jet Global gets the monthly lease payments for airplanes that otherwise would have ended up in the desert,'' he said.

Falcon Air also flies for the Department of Defense, universities, tour operators, cruise line groups as well international carriers like Bahamasair and Cayman Airways.

Miami Herald