ago, filed for Chapter 11 bankruptcy protection yesterday and cancelled service to Bermuda, Florida and Las Vegas.

Kiwi blamed past debts, the Federal Aviation Administration decision to partially shut the carrier down this summer and the effects of the ValuJet crash for the company's poor performance.

"Kiwi has slowly bled to the point where we have to take action,'' said Jerry Murphy, president and chief executive of the Newark, N.J.-based carrier.

Starting today, Kiwi will only fly between Newark, Chicago and Atlanta, with full refunds offered to travellers booked on flights to Bermuda, Las Vegas, Orlando, Tampa and West Palm Beach in Florida, Kiwi spokesman Rob Kulat said.

The carrier has had three straight profitable quarters, but remains nearly $40 million in debt, said Murphy The ValuJet crash on May 11 "started a downward spiral that was dramatically accelerated when the FAA, under intense public and media pressure, took the unusual step of putting four aircraft on the ground although we have a perfect flying record,'' Murphy said.