Big Sky Airlines, which has flown the Montana skies for three decades, will fly its last routes the morning of March 8, park the last Beechcraft 1900s in Billings, and then end operations.

In a letter to employees late Thursday, Big Sky President Fred deLeeuw reaffirmed a deadline announced last month that most of the remaining 140 employees have just 16 days left on the job.

"It's a sad day for all of us, but the harsh economics of the global and national economies, the staggering fuel costs and the inefficiency of flying just four airplanes couldn't be overcome," deLeeuw said.

In December, Big Sky Airlines and its parent company, MAIR Holdings Inc., of Minneapolis, announced the airline was halting East Coast flights in January and would stop service in Montana on March 8 and go out of business. The companies are losing more than $500,000 per month, deLeeuw said, and that cannot be sustained.

Great Lakes Aviation of Cheyenne, Wyo., took over Big Sky's Essential Air Service routes in Montana effective Feb. 1, but won't be ready to fly them until at least July due to a lack of pilots and planes. That means seven Eastern Montana cities - which have been subsidized by the U.S. Department of Transportation's EAS program designed to bring air service to isolated communities - will have no regularly scheduled air passenger service for several months at best.

Big Sky also will stop flying to Helena and Missoula, which have not been subsidized routes.

Big Sky owns seven planes and leases 10. Six were parked in Cincinnati, Ohio, after Big Sky pulled out of East Coast routes it started flying last spring.

Attempts to lease Big Sky planes to Great Lakes have been blocked by two other aviation companies, deLeeuw said.

"Great Lakes is trying to sublease them or get us to assign the leases, which we're willing to do, but we can't get Mesa (Airlines), the owner or Raytheon, the financier, to approve the transaction," deLeeuw said.

After March 8, about 25 people will remain on the payroll to lease or sell Big Sky airplanes, dispose of other properties and leases and to move the corporate offices from the Wells Fargo Bank building to the Billings Logan International Airport, deLeeuw said.

Big Sky assets may be liquidated or sold to an out-of-state operator, he said, and MAIR Holdings will cease to exist in six to eight months.

"We've had several offers to buy the company, but that wouldn't be to fly in Montana because Great Lakes has the routes," deLeeuw said.

MAIR executives have rebuffed an offer by Phoenix Acquisition LLC, a company formed by Big Sky employees to buy the airline and keep it flying in Montana, deLeeuw said.

"It was not economic," deLeeuw said. "It's the only offer where someone trying to buy the company has had the seller pay for it."

However, Phoenix Acquisition board member and Big Sky pilot capital Bruce Tall said the buyout offer still makes sense.

"It's going to cost MAIR Holdings, by our estimate, $4 (million) to $6 million to shut down," Tall said. He could not disclose other details of the negotiations due to a confidentiality agreement.

Phoenix Acquisition needs an investor or investment group to step forward and put $7 million to $8 million into Big Sky, Tall said, and this deal could work for both sides and for Montana. "This airline can be bought for a discounted price, and it would be profitable from day one," he said.

Tall said the Phoenix Acquisition business plan found that the company could be bought for $3 million, plus a $2.5 million security deposit and $2 million for operating capital.

For the employee offer to succeed, the Transportation Department also would have to reverse its earlier decision to award the Montana EAS routes to Great Lakes.

Evan Barrett, Gov. Brian Schweitzer's economic development officer, said the governor's office hasn't seen the Phoenix Acquisition business plan yet, but he said the employee offer needs to be put on the front burner and MAIR executives encouraged to give the deal serious consideration.

It appears the state of Montana and MAIR Holdings both would be better off with a sale rather than liquidation, he said.

He said he will also push both Great Lakes and the Transportation Department to start service sooner. "It creates some real isolation, which isn't an acceptable situation," Barrett said.

Barrett recently tried to book a flight for next week from Helena to Billings, which are separated by about 240 road miles. A staff member chased all over the Internet, couldn't book Big Sky and finally was routed on a Sky West flight through Salt Lake City.

"I was going to hop on Big Sky, fly down late and have meetings, fly back in the morning and never miss a beat in Helena," Barrett said.

What would have been a $300 flight on Big Sky will cost $1,400 on Sky West, he said.

Business executives, tribal officials and residents flying Big Sky to Billings for medical treatments will be affected and so will doctors flying to rural Eastern Montana cities to help provide medical care.

Dr. Michael Bush, medical director for St. Vincent Healthcare emergency services in Billings, has been flying Big Sky to the hospital in Glasgow several times a year to staff the weekend emergency room shifts. Driving six hours one-way won't be safe, he said.

"Obviously, I am sad for myself. I'm sad for the physicians I provide some relief to. I'm really just sad for the communities involved," Bush said.