Audit on Defunct Airline Provider Found Violations of Federal Regulations

LINCOLN–(KFOR Dec. 14)–The audit on Colorado-based Fly Next, LLC, who operated as Red Way Airlines out of the Lincoln Airport, has been completed by the Nebraska State Auditor’s Office and shows the airline service had violated federal regulations and misused about $3.7-million in American Rescue Plan Act funds from the City of Lincoln and Lancaster County.

In the report released Thursday, Red Way’s marketing strategy, which appears to have been centered around an attempt to attract an abundance of passengers through low air fares, failed to produce the desired outcome. That resulted in a lack of sufficient operating revenue, plus questionable expenditures from the Federally mandated escrow account, which soon led to the airline shutting down after three months of operation.

The original proposal from Red Way to the Lincoln Airport had nearly $9-million in ticket sales through the first three months of service.  About a quarter of that amount was reached.   Also found by Foley’s office, Red Way submitted invoices that had errors but were still processed.

On Tuesday, the Auditor’s Office received email confirmations from 24 Red Way customers had not yet received refunds.

Red Way offered flights to Atlanta, Austin, Dallas, Las Vegas, Minneapolis, Nashville, and Orlando out of the Lincoln Airport.  Service launched in June 2023 and ended abruptly on Aug. 31, 2023, with the airline citing costs and a lack of resources for the shut down.

The full 84-page report from the Auditor’s Office is linked below.

Nebraska State Auditor’s Report on Fly Next, LLC, DBA Red Way Airlines