The Latest in the Airline Debacle

Reports suggest emptier skies ahead.

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High hopes for small-plane air-taxi services have been getting a ton of press lately.

Too bad their poster child is sputtering. Layoffs and funding woes are plaguing air-taxi start-up DayJet, a company touted as the future of commuting for short-hop flights on superlight jets to and from out-of-the-way spots.

At the same time, regional and charter operator ExpressJet is getting slammed by the credit crisis. Portfolio's Felix Salmon notes that the carrier put $65 million into auction-rate securities that promptly froze up. Now it needs access to cash, or it could follow the likes of Frontier into bankruptcy.