Founded at Kahului in the fall of 1965 to offer flights to Honolulu and flight-seeing tours. Employing a Beech 55 and often competing with Tropic Air, Valley inaugurates services on October 29 and continues them until it goes out of business in 1967.
VALUJET AIRLINES: United States (1993-1997). Valujet, which will soon be compared to low-cost predecessor PEOPLExpress, is established at Atlanta in June 1993 by Robert Priddy, a founder of Atlantic Southeast Airlines, Maurice Gallagher and Tim Flynn, cofounders of Westair Commuter Airlines and former Continental Airlines President Lewis Jordan. Respectively, the four take the titles: chairman/CEO, vice chairman/treasurer, director, and president/chief operating officer. Investment is sought through public stock offering under the Nasdaq stock symbol VJET.
The newly assembled workforce dispenses with formal uniforms; tickets, nonrefundable, are also not required. Advertisements emphasize pursuit of a low-fare, low-cost, low-frequency leisure market. Twice-daily “fun and friendly” low-cost, roundtrip, scheduled passenger service is inaugurated on October 26 from Atlanta to Orlando, Jacksonville, and Tampa with a pair of Douglas DC-9-32s formerly operated by Delta Air Lines.
The competition is directly with the dominant carrier, Atlanta-based Delta Air Lines. The fleet is increased by four more Douglas transports by year’s end and the carrier is the first to adopt a cartoon as its official logo. When Delta Air Lines counters with $49 matching fares, Valujet is able to hold on, although one counter-pricing effort by the major in mid-December brings a predatory-practice complaint from President Jordan to the DOT.
Revenues of $5.8 million are reported at year’s end and the new entrant is profitable.
Eight more DC-9-32s are acquired in early 1994 and destinations served grow on January 12 to include Nashville, West Palm Beach, and Washington, D. C. (IAD). On January 28, a landing DC-9-30 goes off an icy runway at Washington, D. C. (IAD) and skids into the grass, forcing officials to close the airport for almost two hours. None of the 101 passengers and 5 crew members are injured.
Other markets entered in the first quarter include Memphis, New Orleans, Louisville, Savannah, Fort Myers, and Fort Lauderdale. Atlanta and Washington are designated “focus cities,” and city pairs visited from those communities are chosen on a basis of low-cost profitability. Through the end of April, the airline has flown a cumulative total of 425,000 passengers.
New four-times-per-day service is inaugurated from Atlanta to Philadelphia and Chicago (MDW) on May 24. Meanwhile, Delta Air Lines withdraws from its competition with Valujet at Atlanta, preferring to retain its high-yield connecting traffic and many frequencies. For its part, another competitor facing Valujet’s low-frequency, low-fare approach, USAir, fights back with its own lowered fares. Four daily nonstop frequencies are initiated on July 12 from Atlanta to Dallas (DFW) for a one-way fare of $69. A $41-million order is placed in August with ABS Partnership and Pratt & Whitney for 15 DC-9 hush-kits.
Thrice-daily nonstop roundtrips commence on September 8 between Atlanta and Indianapolis. On October 1, a $ 16-million agreement is signed with THY Turkish Airlines (Turk Hava Yollari, A. O.), for the purchase of nine used DC-9-32s, together with spare parts and engines.
Passenger boardings for the year total 2,041,000 and revenues are $133.9 million. With expenses of $99.4 million, there is a pretax profit of $34.5 million and a net gain of $20.7 million.
There is no change in the size of the workforce in 1995. The most successful of recent new entrants, Valujet is elevated to the ranks of National carriers by the DOT early in the year. The company adds 21 more jetliners to its fleet.
On January 9, Valujet begins service from Atlanta to Detroit (DTT), setting off a price war with Northwest Airlines. Northwest not only lowers its own fares, but quickly inaugurates flights to Atlanta from Flint, Lansing, Grand Rapids, Kalamazoo, Muskegon, and Saginaw.
Daily roundtrips commence on February 8 between Windsor Locks, Connecticut, and Washington, D. C. Eight more communities will join the system over the next 10 months, with Boston and Orlando marked to become focus cities. On April 10, a 2 to 1 stock split occurs and there is now 26.6 million shares outstanding.
The engine of Flight 597, a DC-9-32 with 62 passengers and bound for Miami, malfunctions as the jetliner, one of the first to be received from THY Turkish Airlines (Turk Hava Yollari, A. O.), rolls for takeoff from Atlanta on June 8. An engine fragment strikes a fuel line causing a fire that will destroy the aircraft. Seven people are injured in the plane’s forced evacuation. The same day, thrice-daily, $49, one-way service is inaugurated to Boston from Washington, D. C. (lAD) and thrice-daily $149 one-way from Atlanta.
The NTSB will report on July 6 that the June fire has been traced to faulty JT8D engine repair on a Pratt & Whitney unit outsourced to Turkey for overhaul. It issues an airworthiness directive requiring that all JT8Ds acquired from or repaired by THY be inspected.
Service to and from Montreal is discontinued on July 11. At month’s end, it is reported that upwards of 300 Mary Kay Cosmetics sales representatives, who thought they had booked flights, have been duped in a credit card scam.
During the summer, flight attendants continue to engage in slapstick humor as the airline continues to promote itself with the slogan “Good Times, Great Fares.” USAir informs the SEC on August 14 that the DOJ is examining charges of predatory pricing in certain cities made against it by Valujet and Nations Air Express. The charges will be dismissed. Valujet launches the MD-95 on October 19 with an order for 50 of the type and options on another 50.
The Atlanta-based carrier sues Trans World Airlines (TWA) and Delta Air Lines on November 9 over landing slots at New York (LGA). Eight days later, U. S. Federal Judge G. Ernest Tidwell clears the way for Delta to lease 10 of TWA’s New York (LGA) slots by rejecting Valujet’s request for an injunction.
While climbing away from Dallas (DFW) on December 12, Flight 224, a DC-9-32 with 59 passengers, suffers the failure of its No. 2 engine. The pilot declares an emergency and makes a successful one-engine-out landing back at the point of origin; no injuries are reported.
On December 15, “focus city” operations are set up at Orlando and Boston. Nonstop frequencies are inaugurated from Boston to Orlando and Tampa; the same day, nonstops commence from Orlando to Boston.
Having doubled its size, the newest national experiences tremendous growth in traffic, revenues, and profits. Enplanements skyrocket 153.7% to 5,177,629. Operating income surges 174.7% to $367.75 million while costs are unable to keep pace, rising to just $260 million. Operating gain climbs to $107.75 million while a net profit of $67.76 million, three times more than the previous year, is posted.
The employee population stands at 1,411 in 1996. Early in the year, company officials admit that ferocious competition from Southwest
Airlines (2), which will enter the Florida market on January 22, has had an impact upon Valujet’s ability to enhance its Sunshine State market. Still, expansion continues in January as the carrier builds up a hub at Raleigh/Durham.
Flight 558, a DC-9-32 piloted by Capt. Steven Rasin and en route from Atlanta to Nashville on January 7, suffers a sudden ground spoiler deployment while on final approach to Nashville. The aircraft makes a hard landing that causes extensive damage to the fuselage underside and the forward landing gear. No injuries are reported as crew and passengers make an emergency evacuation.
On January 11, nonstop service is inaugurated to Raleigh/Durham from Orlando and Boston. At the same time, twice-daily direct frequencies begin from Raleigh/Durham to Boston and once daily to Orlando. Introductory one-way fares of $79 are charged for the Massachusetts service and $69 to the Florida stop.
The next day, Flight 281, a DC-9-32 arriving from Boston with 30 passengers, slides off the Washington, D. C. (lAD) runway after landing. The incident, caused by ice that had formed on the pavement, does not result in any injuries.
Nonstop daily frequencies begin on January 18 from Boston to Fort Lauderdale and West Palm Beach and from Orlando to Memphis and Philadelphia. On January 26, a DC-9-30 skids off an Atlanta runway and gets stuck in the mud. No one was injured, but 101 passengers on Flight 260 from New Orleans must be bused back to the terminal and reassigned to other flights.
While landing at Nashville after a flight from Atlanta on February 1, Flight 558, a DC-9-32 with 75 passengers and 5 crew members, suffers a burst tire upon touchdown. The plane comes to a stop with its right wing resting on the runway; no injuries are reported in the subsequent evacuation.
Under contract with TAD Aviation Services, a reservations center is opened at Newport News, Virginia, in February. At the same time, 1,000 reservations agents employed by the airline are hired by Amlease of Charlotte, North Carolina, and Foxtrot Aviation Services of Reston, Virginia, which take over the reservations functions on an outsourced basis. Three new DC-9-32s are also acquired.
Flight 574, a DC-9-32 with 74 passengers aboard, rolls off the runway after landing at Savannah, Georgia, following a flight from Atlanta on February 28. All aboard are safely evacuated without injury.
On March 1, daily nonstop roundtrips commence between Washington, D. C. (lAD) and New Orleans. Simultaneously, frequencies from Dulles to Charlotte are offered four times daily while those to Pittsburgh become thrice daily. On March 19, company officials announce the inauguration of daily roundtrip flights between Atlanta and New York (LGA).
As a result of the recent in-flight incidents noted above, the company, on April 10, announces that it will voluntarily slow the growth of its fleet while FAA regulators review the company’s operation.
Five-times-daily roundtrips commence as scheduled on May 1 from Atlanta to New York (LGA). The same day, thrice-daily Boston-Philadelphia roundtrip service is launched, along with thrice-daily roundtrips from Atlanta to Mobile and twice-daily roundtrips from Atlanta to Fort Walton Beach, Florida.
Just after takeoff from Miami (MIA) for Atlanta on May 11, Flight 592, a DC-9-32 piloted by Capt. Candalyn Kubeck with 109 passengers, crashes into the dark waters and muck of the Florida everglades some 85 miles from the airport; there are no survivors. Both the NTSB and FAA begin immediate investigations into the cause, which will later be laid to exploding oxygen generators placed aboard in error.
The disaster, coming on the heels of the year’s earlier incidents and intense media scrutiny, puts Valujet’s survival in doubt. On May 16, the FAA launches an intense inspection regime. The next day, while FAA inspectors visit en masse, the carrier slashes its schedule to 320 daily flights. In the week after the crash, the company refunds some $4.1 million to customers whose flights have been cancelled. Company stocks fall to their lowest level in a year and, on May 20, cofounder Timothy P. Flynn sells 1.5 million of his 5.98 million shares of common stock.
Company officials begin to meet with FAA inspectors at Atlanta on May 22 to discuss results of safety inspections along the company network. By the end of the first week of June, Anthony Broderick, FAA associate administrator for regulation and certification, is able to announce that 1,000 detailed safety checks have been made of Valujet since May 11. Although concern exists over quality assurance procedures at the airline, none of the findings from the inspections have prompted the agency to revoke the carrier’s operating certificate.
At the same time, NTSB Chairman James Hall asks the FAA to review airline hazardous materials handling procedures and calls for a ban on the transport of chemical oxygen generators on passenger airliners.
Admitting that both his agency and Valujet had failed to properly oversee maintenance operations, FAA Administrator David R. Hinson reaches the decision on June 16 that the company cannot keep up with the volume of violations and difficulties uncovered by inspectors over the past 30 days. On June 17, before the government can issue a public grounding order, Valujet is “voluntary” shutdown by President Jordan, who hands in his Part 121 operating certificate and agrees to a binding consent order. Granted immunity for violations known to the FAA before June 18, the consent order also requires Valujet to immediately undertake a three-phase program to address its shortcomings in quality control, training, and engineering. Valujet is the largest U. S. airline ever shut down for safety concerns.
On June 24, FAA Associate Administrator Broderick is forced to retire; the respected safety official is assigned responsibility for the safety oversight failures of his agency. The Aviation Subcommittee of the Transportation and Infrastructure Committee of the U. S. House of Representatives holds hearings on the Valujet shutdown during the month’s last week. FAA officials deny allegations of White House involvement in the Valujet grounding.
Former Trans World Airlines (TWA) Senior Vice President-Maintenance and Engineering James Jensen accepts the same post at Valujet on July 1. Later in the week, President Jordan submits a plan for the resumption of service to the FAA. The document outlines its future, particularly in terms of maintenance training and supervision, as well as its employee compensation program and oversight of its outsourced maintenance operations.
On July 15, the FAA moves to restrict the transport of certain hazardous materials on airliners, particularly oxygen canisters of the type that contractor SabreTech had placed aboard the Valujet plane blamed for the May 11 disaster. Three days later, FAA safety inspectors in Atlanta prohibit carrier personnel from conducting training or ferry flights; the ban will be lifted two weeks later. It is now revealed that gaps in the company’s records for part of July have effectively disqualified all of the airline’s pilots and check airmen and the FlightSafety International instructors contracted to train them. The check pilots and instructors must be retrained.
Meanwhile, the carrier’s costs mount and during the summer, Valujet renegotiates its bank debt in an effort to avoid default.
The crash program by a team of 300 Valujet officials to make the stipulated corrections in the June 18 consent degree is completed by the self-imposed deadline of August 1. Documents are provided to the FAA supporting this claim. In an effort to prevent the government from grounding its pilots, the carrier on August 5 begins to require four hours of DC-9 simulator training and a check ride for all of its laid off pilots. Seventy pilots are recertified by August 21. At the same time, some 500 other employees are recalled for training: pilots, 100 flight attendants, 175 customer service agents, and 175 reservations agents.
The carrier’s landing slots at New York (LGA) are returned to Continental Airlines on August 26.
On August 29, both the DOT and the FAA grant approval for the carrier to relaunch some services, under heavy scrutiny. Others are flown by charter operators under contract. The company’s certificate is returned on August 30, with permission to resume limited operations. On September 26, the DOT rules that it has found the airline and its management fit and willing to run a safe operation.
Although AFA attempts to halt the resumption of limited Valujet service by filing a suit in U. S. Court of Appeals, Washington, D. C., claiming that the carrier remains unsafe, the judge in the case refuses to issue an injunction.
Despite a 30-min. delay, a DC-9-32 flying from Atlanta takes the airline back into operation on September 30 with a scheduled service to Washington, D. C. (lAD). The Florida communities of Fort Lauderdale, Orlando, and Tampa are also visited during the first day of resumed service. A total of 35 daily frequencies are offered during the remainder of the month with $19 one-way introductory fares available for each flight.
Although the inaugural day is a success, financial ruin continues to stare the carrier in the face. The situation is not helped any when, on October 1, Delta Air Lines begins “Delta Connection” low-cost service. Many of the markets targeted by the major’s division will be former Valujet destinations to which Chairman Priddy and President Jordan had hoped to return.
Service is resumed on October 4 to Columbus, Newport News, and New Orleans and on October 16, Louisville, Memphis, Savannah, Jacksonville, and Fort Walton Beach. Fifteen more DC-9-32s and MD-80s are added to handle the increased schedule.
While these services are being resumed, Valujet begins to air a series of no-frills, 30-second TV spots on Atlanta cable TV systems thanking loyal employees for remaining with the company. At the same time it attempts to boost the airline’s image with the theme “Valujet’s back, and here are some reasons why.”
Board Chairman Priddy resigns his posts on November 6, remaining as chairman/CEO of the Valujet, Inc. holding company; his mantle is taken up by airline President Jordan. The new Valujet Airlines President/ CEO is D. Joseph Corr, who had earlier followed Mr. Jordan into the presidency of Continental Airlines.
On November 12, Valujet reports the loss of $21.9 million in the third quarter and a total of $54.7 million in costs associated with the May 11 crash of Flight 592. The same day, the NTSB begins a week of public hearings on the May disaster. These disclose numerous operations and maintenance failures by the airlines, by its subcontractors, particularly canister-shipper SabreTech, and by the FAA
Two days later, the FAA moves to require fire detection and suppression systems in the cargo holds of all airliners and acts to ban the transport of oxidizing materials that can feed fires. Also on November 14, the company, in its regular filing with the Securities and Exchange Commission, reports that because of costs associated with the disaster, it may be in default of its loan agreements by year’s end.
In early December, the company, having lost confidence in one of three charter operators with which it has contracted, cancels all flights under its name to Dallas and Fort Myers. Recently added flights to West Palm Beach are, however, continued.
A contract is signed with Sun Pacific International and Kiwi International Air Lines on December 26 under which the two will operate charter flights from Atlanta to Dallas and to Fort Myers and West Palm Beach, Florida, through January 6. The flights will carry passengers who booked with Valujet when it advertised the service before it received FAA approval.
Overall customer bookings plunge 42% to 3,003,883. Revenues fall an almost equal 40.3% to $219.63 million as expenses rise 4.5% to $271.03 million. The previous year’s giant profits are turned into huge losses: $51.39 million (operating) and $41.47 million (net).
As 1997 begins, the FAA allows the company to add three more DC-9s to its fleet, but withholds permission for it to resume flights to Dallas (DFW). Still, on January 3, daily roundtrips resume from Atlanta to West Palm Beach, Florida, followed by a resumption of service from Georgia to Fort Myers on January 16.
A twentieth DC-9 joins the Valujet fleet during the last week of January. At this point, service has been restored or added to 18 cities. With FAA approval, frequencies to Boston are reinstated on February 20 from Washington and Atlanta.
At this point, Valujet accuses Delta Air Lines and several other majors of “aggressive predatory pricing” as a result of its January traffic downturn. Delta rejects the claim, as do the others.
The carrier installs smoke detectors in all of its airplane cargo holds. Thrice-daily nonstop roundtrips commence on March 6 from Atlanta to Akron-Canton Regional Airport in Ohio.
Flights from Atlanta to Dallas (DFW) are restarted on April 10 and to Charlotte on May 15. On the latter date, the carrier launches thrice-daily roundtrips from Atlanta to Flint, Michigan. On May 21, Valujet seeks permission to restart services to New York (LGA).
Although 15 lawsuits arising from the previous year’s crash have been settled out of court, the first of 40 more go to trial in June. During the month the company holds merger talks with American Trans-Air that will shortly prove unsuccessful.
On July 1, officials of the airline, having decided that they cannot return the company to profitability under its current identity, sign an agreement to merge with Airways Holdings, parent of Airtran Airways. Pending all necessary approvals that will be duly received, the union will occur within three months, with the Airtran name surviving. The arrangement calls for a straightforward one-for-one exchange of 9,067,937 shares of Valujet stock valued at $61.8 million. Valujet’s president Corr will become CEO of the enlarged operation, which will operate a fleet of 40 Boeing 737s and DC-9s.
Due to a lack of traffic, the company suspends services to Charlotte, Louisville, and Columbus on the day after Labor Day.
In September, the NTSB issues its findings concerning the crash of Flight 592. Responsibility for the disaster is assigned to SabreTech, the FAA, and the airline itself. The decision to add the airline into the mix is largely a last-minute attachment to the final report demanded by NTSB board member John Goglia. In its response to the findings, Valu-jet condemns Goglia; “his obvious bias and personal conduct discredit the reputation of this board,” the airline states.
On October 1, Valujet Airlines begins flying under the name Airtran Airlines.
Three years after the disaster, on May 11, 1999, a new concrete memorial is dedicated in the Everglades to the memory of the victims. Designed and built by students from the University of Miami, the monument consists of 110 gray concrete pillars—one for every lost person—atop a triangular-shaped platform that points toward the crash site, some 8 mi. N.
Two months later on July 15, the State of Florida charges SabreTech, Inc. with 100 counts of third-degree murder. A former SabreTech vice president and two mechanics are indicated by a federal grand jury for a cover-up involving hazardous waste violations and other crimes.
VANAIR, LTD. (VANUATU INTERNALAIR SERVICES): Private Mail Bag 069, Bauerfield Domestic Terminal, Port Vila, Vanuatu; Phone 678 22 827; Fax 678 22 438; Http://www. islandsvanuatu. com/vanair. htm; Code V3; Year Founded 1990. Vanair is established at Port Vila in early 1989 to provide scheduled internal services among the islands of the former New Hebrides. Merger discussions are held with Air Melanesiae, but these fail, as does Air Melanesiae in early November and on November 29 its assets pass to Vanair. Managing Director M. Pope’s initial fleet now comprises 3 used Pilatus-Britten-Norman PBN-2 Islanders and a de Havilland Canada DHC-6-300 Twin Otter.
Flights commence at the beginning of January 1990. A Pilatus Brit-ten-Norman BN-2A Trislander is destroyed on the ground at Vanuatu on January 3.
Two more Twin Otters are acquired in 1991, along with an Embraer EMB-110P1 Bandeirante. In October 1992, a contract is awarded to Australian Regional Airlines (Pty.), Ltd. for the modification of the Twin Otter; the repair job is the first such ever won by the Townsville-based airline.
Operations continue apace in 1993-1994. During these years, David Young becomes managing director. A fourth DHC-6-300 is purchased and an option is taken on an Avions de Transport Regional ATR42-520.
Flights continue in 1995-1999 with Willie Naripo becoming managing director. The ATR42-520 is not acquired; instead, the fleet is upgraded by the addition of a de Havilland Canada DHC-8-103. Scheduled destinations now include Aniwa, Craig Cove, Dillons Bay, Emae, Espir-itu Santo, Ipota, Lamap, Lamen Bay, Longana, Lonorore, Norsup, Paarva, Sara, South West Bay, Tanna, Tongoa, Torres, Ulei, Walesdir, and Walaka. A marketing alliance is entered into with Air Vanuatu.
Airline employment totals 145 at the beginning of 2000.
World History
