CHALLENGEAIR, S. A.: Avenue Louise 416, BTE 17, Brussels, B-1050, Belgium; Phone 32 (2) 647-2515; Fax 32 (2) 646-5997; Code CH; Year Founded 1994. Owned by Luc Mellaerts and Pierre Jottrand, ChallengeAir, S. A. is set up at Brussels on April 12, 1994 to operate inclusive-tour and other charter passenger flights on behalf of other airlines and travel industry groups. With Mellaerts as chairman and Jot-trand as president/chief pilot, ChallengeAir recruits a workforce of 12 and leases 1 Douglas DC-10-30 from Air France.
Revenue operations commence on June 1 as the company begins flying weekend roundtrips between Manchester and Tenerife on behalf of Britannia Airways, Ltd. Later in the year, services are also provided for Air Europe Italy, S. p.A.
A second DC-10-30, also painted in an all-white scheme with olive drab and red markings, is acquired in 1995. It is almost immediately wet-leased to the French charter operator Corse Air International, S. A., better known as Corsair, to assist that tour operator to meet its summer capacity requirements.
The first Douglas wide-body is also wet-leased to Corsair in 1996 and the carrier operates relatively few flights of its own this year. In 1997-1998, the capacity charter is split between Corsair and Caledonian Airways, Ltd.
It is understood that flights continue without change during the remainder of the decade; exact information is, however, unavailable.
CHALLENGE AIR CARGO: 3401 NW 67th Ave., Building 805, Miami, Florida 33122, United States; Phone (305) 590-1850; Fax (305) 590-1860; Http://www. challengeaircargo. com; Code WE; Year Founded 1985. The second of two wholly owned subsidiaries created by Challenge Air Transport, CAC is born in 1985 and provided with the parent’s Boeing 707-320C under lease. Regularly scheduled and charter all-freight revenue operations commence in the fall over several of CAT’s previously flown cargo routes.
In June 1986, the subsidiary severs its connections with its parent and becomes a separate entity under William F. Spohrer, the founder and chairman/CEO. Employing 2 B-707-320Cs, the carrier’s extensive network of Latin American destinations is maintained; places visited come to include Bogota, Cali, Guatemala City, La Paz, Lima, Managua, San Pedro, Sula, San Salvador, Sao Paulo, and Manaus.
Freight traffic skyrockets 113% this year to 62.17 million FTKs.
During 1987, the carrier transports 69.5 million FTKs. Although a $2.7-million operating profit is generated, there is a $740,000 net loss. Airline employment is increased by 50.5% in 1988 to 167. In December, the fully owned subsidiary Challenge Air Express is established at Miami to employ dedicated space on regular CAC flights.
Cargo rises by 38.7% to 110,553 FTKs. Revenues accelerate 25.1% to $26.6 million and even though costs rise only 2.2%, operating income falls to reach $1.5 million. The net bottom line turns around and shoots up to $263,700.
The workforce swells 55.2% in 1989 to 450 and the fleet includes 1 B-707-330C and 2 DC-8-63Fs. Orders are placed with Ansett Worldwide for 2 more B-757-23PFs as Challenge Air Express overnight, international document, and small package service to Bogota and Cali and second-day service from Miami to any other major city in Colombia begins in January. Weekly scheduled routes are stretched in July to Asuncion, San Salvador, Caracas, Quito, and Guayaquil.
The Luxembourg-based all-cargo airline Cargolux Airlines International, S. A. now becomes the company’s general sales agent in Europe. The first B-757-23PF, Spirit of Miami, is received on August 1. During the summer, U. S. Customs discovers 120 pounds of cocaine aboard a company aircraft just landed in Miami and imposes a $2 million fine.
The carrier reacts by expending $500,000 in security investments and hiring a well-trained seven-man crew of security agents, ex-policemen all. Impressed by the good-faith effort, the government drops its fine in September. Also in September, twice-weekly service begins from Miami to Chicago and weekly flights start from Miami to Los Angeles; the Douglas freighters bring in, via both routes, flowers, fruit, and vegetables from Chile, Ecuador, and Venezuela.
Beginning in October the Spirit of Miami is employed to offer weekly freighter service from Miami to Chicago and Los Angeles.
Freight traffic nearly doubles, accelerating 49.8% to 166.42 million FTKs. Revenues do even better, jumping 59.6% to $42.5 million. Operating income ascends to $10.26 million and net gain reaches $2.48 million.
Airline employment is cut by 33.3% in 1990 to 300, but the fleet is increased by the addition of another B-757-23PF. A second hub is opened at Atlanta, from which flights are scheduled to Panama City and San Jose, Costa Rica.
Cargo moves ahead by 6% to 173.24 million FTKs and revenues climb 27.3% to $54.08 million. Expenses, however, increase by 73.3% to $55.8 million and force an operating loss of $1.72 million. The net loss is $2.09 million.
The employee population increases by 50% in 1991 to 450 as a codesharing agreement is signed in December by Chairman Spohrer with Deutsche Lufthansa, A. G.
Orders are placed for a fourth B-757-23PF and freight traffic climbs 3.3% to 192.08 million FTKs. Revenues jump 18.5% to $64.11 million, expenses ascend only 4.2% to $57.96 million, and there is an operating profit of $6.14 million. Net gain surges to $3.38 million.
Company employment is increased by another 50% in 1992 to 675. In accordance with the new pact, the German flag carrier in January adds a B-747F to its Frankfurt-Miami route, feeding European cargo to Challenge for continuation to Bolivia, Costa Rica, Ecuador, Guatemala, and Peru. A marketing agreement is signed in March with Iberia Spanish Airlines (2) (Lineas Aereas de Espana, S. A.), providing for Central American connecting flights to and from Madrid.
In July, a marketing agreement is signed with Aeroflot Russian International Airlines (ARIA); under its terms, the two carriers pledge to feed each other’s routes between Europe and Latin America via Miami. Scheduled all-freight flights commence in August from Miami to Brazil, followed by Los Angeles to Brazil service in September, as well as Miami-Honduras frequencies.
Cargo advances by 21.1% to 236.33 million FTKs and revenues move up 22.2% to $78.3 million. Expenses are lower and allow profits — also lower—to be generated: $1.66 million (operating) and $407,787 (net)
The payroll is slashed by 35.6% in 1993 to 435 and the fleet includes 3 B-757-203PFs and 1 B-707-330C. A new air cargo center is opened at San Juan, Costa Rica, in January and new flights commence from Miami to San Pedro Sula in Honduras. Weekly service is initiated in April between Los Angeles and Brazil.
Freight falls 9.4% to 214.05 million FTKs and revenues ascend 14.9% to $90.03 million. Expenses rise 18.4% to $91.09 million and the operating loss is $1.06 million. The net loss is $1.31 million.
Airline employment is increased by 2.1% in 1994 to 661 and papers are signed for the construction of a 165,000-sq.-ft., $20-million, fully automated cargo center at Miami (MIA).
Cargo recovers, moving ahead by 3.1% to 257.34 million FTKs, and revenues advance by the same percentage to $91.62 million. Expenses decline 1.9% to $69.46 million, allowing a pretax gain of $22.13 million and a net profit of $2.3 million.
The workforce grows another 21% in 1995 to 800. In August, a DC-8-73F is leased from Southern Air Transport for eight months.
The company’s 5 aircraft operate a total of 250.2 million FTKs, an increase of 11.2%. The operating profit plunges to $197,000 and there is a $674,000 net loss.
The employee population does not change in 1996. The carrier’s status as the only all-cargo operator between the U. S. and Peru is challenged by seven other carriers, who request routes from the DOT.
In May, Challenge leases a B-767-34AFER from UPS (United Parcel Service) on a month-to-month basis. The wide-body, which replaces a DC-8F previously leased from Southern Air Transport, will be employed to operate weekend all-cargo services from Miami (MIA) to Venezuela and Brazil.
Cargo moves up 5.9% to 264.87 million FTKs and revenues (through September) reach $79.84 million. Unhappily, expenses total $87.15 million and the previous year’s small operating gain becomes a $7.5-million loss. The net loss deepens to $8.26 million.
Destinations visited in 1997 include Bogota, Cali, Caracas, Guatemala City, Guayaquil, La Paz, Lima, Managua, Manaus, Panama City, Quito, San Jose, San Pedro Sula, San Salvador, and Sao Paulo.
Arrangements are made to acquire 3 (with 2 options) former Japan Air Lines Company, Ltd. (2) Douglas DC-10-41s that are being converted into freighters by Aeroavali for Ten Forty Corporation.
A total of 310.56 million FTKs are operated, a 17.3% increase over the previous year.
Operating revenues advance 18.8% to $131.43 million, while expenses climb 5.8% to $124.97 million. The previous year’s loss becomes a $6.45-million operating gain. In addition, a $6.65-million net gain is celebrated.
In early September 1998, the carrier leases the newly completed 205,000-sq.-ft. Air Cargo Center at Dallas (DFW). The center becomes a second hub and is employed to help Challenge service its growing South American business.
At the same time, as the result of a recently signed strategic agreement with UPS, enhanced scheduled express service via Brazil to South America becomes available five days a week. Beginning on September 15, Challenge operates a wet-leased UPS B-767-34APF into Campinas, one hour from Sao Paulo.
This service complements additional Latin American routes also announced by UPS and Challenge as part of their pact. Under this agreement, Challenge has contracted with UPS to operate wet-leased B-757-24APF freighter flights between Miami and the Dominican Republic on Tuesdays, Thursdays and Sundays and between Miami and Venezuela on Wednesdays and Fridays. A wet-leased B-767-34APF is also operated by Challenge for UPS from Miami and Honduras to Costa Rica on Saturdays.
The first 2 of 3 ex-JAL DC-10-41Fs are acquired in October-November; they will be joined by the third in June.
Freight traffic during the 12 months advances by 8.61% to 324.79 million FTKs. Revenues climb 5.1% to $138.19 million, while expenses move ahead by 14% to $142.53 million. The resulting operating loss is $4.33 million and there is also a $5.5-million net loss.
Following several weeks of negotiations, the company’s assets, including all leased facilities, ground equipment, computer systems, and route authorities, but not including aircraft, are sold to UPS (United Parcel Service) on June 28, 1999.
Overall cargo traffic declines 5.7% to 306.28 million FTKs. Revenues advance 7.8% to $148.95 million, while expenses jump 12.4% to $160.26 million. The operating loss almost triples, deepening to $11.3 million, while the net loss doubles to $10.9 million.
Airline employment at the beginning of 2000 stands at 704, a 12.3% reduction in force over the previous 12 months.
World History
