Kiwi International Air Lines enjoyed a flawless safety record and near perfect dispatch reliability rate of 99.6% in its expansion. On the strength of its market reputation, Iverson secured a $25,000,000 IPO proposal co-managed by Dillon Read and Goldman Sachs in fall 1994. When the pilot investors fractured along geographic lines the offer was rejected by the board. In February 1995, founder and chairman Robert Iverson departed.  

After Iverson's departure, the board hired professional (non-pilot) management and advisers. In 1996, KIWI succeeded to secure a $20 million financing package from Recovery Equity Partners, a CA-based private equity fund through the effors of Conexus. At the time Kiwi received the first tranche of the financing package, ValuJet Flight 592 and TWA Flight 800 had accidents in May and July 1996 that caused the death of more than 300 passengers. Following these unrelated accidents, the FAA also increased its surveillance of the airline industry. Because of alleged maintenance documentation issues, Kiwi International was asked to temporarily ground 25% of its fleet. But the airline was allowed to fly again soon after. 

Kiwi, called "one of the best of the recent start-up lines" by Consumer Reports Travel Letter, filed for bankruptcy on September 30, 1996 and after failing to find additional financing, stopped scheduled service on October 15. Ed Perkins, editor of the Travel Letter, noted that other members of the travel press blamed the bankruptcy on chronic undercapitalization, problems with the FAA, and the "media's indiscriminate innuendos about the safety of all low-fare airlines following the Valujet crash"; Perkins suggested a fourth problem for Kiwi: the "pervasive power of the giant lines' frequent-flyer programs, noting Kiwi targeted business travelers. Perkins pointed out that Kiwi's competitors were matching its fares, so their willingness to also include frequent-flyer miles, miles worth about $12-15 per one-way trip, resulting in a loss of customers for Kiwi even after it belatedly established its own program.

In July 1997, a Federal bankruptcy judge agreed to liquidate Kiwi in a $16.5 million deal: Joe Logan, Aviation Holdings and Dr. Charles C. Edwards, an orthopedic surgeon and entrepreneur who had led about 30 business enterprises over his 33 year career, bought Kiwi's assets, in a deal that included a Huntington Station, New York investment firm called NJS Acquisitions, which invested $3.5 million for a 20% stake. In its first five months under Edwards hands-on leadership, Kiwi ended service from Atlanta to Palm Beach and Orlando, and added service from Newark to Boston and Tampa, from Boston to Palm Beach, from Chicago to Tampa, from Atlanta to Tampa, and (on a seasonal basis) from Orlando to San Juan, Puerto Rico.