SkyMall Files for Bankruptcy

After 25 years, everybody’s favorite in-flight read is going to the big hot dog bun toaster turned Wi-Fi hot-spot in the sky.

On Jan. 24, it was announced that SkyMall would be filing for bankruptcy protection in the U.S. Bankruptcy Court in Phoenix, according to The Wall Street JournalOnce a fixture of airplanes selling quirky, infomercial-esque items, it had come under intense competition thanks to rules changes allowing Wi-Fi on planes and stiff competition from online retailers like Amazon, which sell a lot of the same products as SkyMall. As a result, the captive market that airplanes used to be is now not so captive.

Analyzing the numbers, it would appear that the decline was fairly rapid. After making $33.7 million in revenue in 2013, the first nine months of 2014 showed only $15.8 million in revenue, an over 50-percent drop that some are attributing to the rise in airline Wi-Fi networks that allow for more distractions on board. In November, Delta Airlines ended its partnership with SkyMall, citing a “decline in customer use of the publication,” according to a Delta spokesman. Southwest Airlines followed suit in December, two major American carriers that SkyMall depends on for revenue.

Acting Chief Executive Scott Wiley maintains that the brand can still be saved through finding a new buyer for the magazine, hopefully keeping it on planes in a different form. One criticism that emerged was that SkyMall was simply spread too thin with the diversity of quirky items on offer. Popular items included self-aerating wine glasses, self-disposing kitty litter boxes, and 30-foot tall Garden Yetis.

Bankruptcy court filings list SkyMall’s assets at right around $1-10 million, and liabilities at around $12 million. Its three main unsecured creditors include Delta Airlines, American Airlines, and US Airways. It had ceased retail operations on Jan. 16, laying off 47 of its 137 employees in the process. Xhibit Corp, the owner of the magazine, has also filed for Chapter 11 protection.