CHICAGO — A San Francisco-based airline's April Fool's joke triggered a disclosure notice on EMMA.
Virgin America last week said it would launch service at Branson Airport, news that would surely would be welcomed by investors holding $113 million of defaulted bonds assuming they believed such a service would actually draw passengers.
It was all an April Fool's joke.
Virgin America founder Richard Branson, whose Virgin Group is a minority owner of the airline, laid the groundwork for the prank in mid-March when he said on a blog post the company was exploring business opportunities in the city after he "discovered" his great-great-uncle founded the city.
On March 31 the company announced plans to move its U.S. operations there, build a resort, and launch service from the airport. The city was in on the hoax as a means to drum up tourism, according to reports.
UMB Bank NA, trustee on the tax-exempt bonds, was concerned enough about the phony announcement that it posted a disclosure filing on the Municipal Securities Rulemaking Board's EMMA site.
In bold-faced, capital lettering, the notices reads: "THE BOND TRUSTEE IS INFORMED BY THE COMPANY THAT THE ANNOUNCEMENT IS AN "APRIL FOOLS" PRANK. THE BOND TRUSTEE ACCORDINGLY BELIEVES THAT THE "ANNOUNCEMENT" IS NOT GENUINE AND THAT VIRGIN AMERICA IS NOT IN FACT COMMENCING AIR SERVICE TO THE AIRPORT AT THIS TIME."
The privately owned and operated airport opened in 2009 but it has fallen short of meeting initial service and passenger projections. Investors holding the bonds last fall agreed to an amended forbearance agreement that gives the struggling Ozarks air field more time to pick up operations.
Branson Airport LLC's previous forbearance agreement had expired June 30. An amended forbearance will remain in place through June 30, 2015 although violations of terms would allow bondholders to terminate it.
The airport has struggled to build passenger traffic and after some positive momentum hit a setback when Southwest Airlines in December announced it would cease operations to Branson.
The tax-exempt, unrated bonds were sold in 2007 by the Branson Regional Airport Transportation Development District on behalf of private developers. Proceeds funded construction of the airport, which was supposed to boost and benefit from Branson tourism related to its country music venues.