Defunct Red Way Airlines operation cost local taxpayers around $700,000 dollars, says Nebraska State Auditor report

LINCOLN — The Nebraska State Auditor’s office released a report on the now defunct Red Way Airlines Wednesday, which found that the operation cost local taxpayers around $700,000 dollars.

The Lincoln Airport Authority had contracted with Red Way to provide new destinations from the Lincoln Airport, pledging, with approval of the Lincoln City Council and Lancaster County Board, $3 million in pandemic-related, federal American Rescue Plan Act funds for the venture. Red Way Airlines operated flights out of the Lincoln airport for fewer than three months before ceasing operations at the end of August this year due to fewer passengers than expected. 

In its 84-page report, the auditor’s office also found that Red Way violated federal regulations by using an escrow account intended to repay customers for flight cancellations. It found that hundreds of customers may still be owed money amounting to more than $100,000 dollars, despite Red Way’s promise it would provide refunds within 14 days of cancellations.