AIRTOURS INTERNATIONALAIRWAYS, LTD.: Parkway Three, 300 Princess Road, Manchester, England, M14 7LU, United Kingdom; Phone 44 (161) 232 6000; Fax 44 (161) 232 6610; Code VZ; Year Founded 1990. Airtours International, Ltd. is established by Air-tours, plc, the U. K.’s second largest package-vacation company, on October 1, 1990 to offer holiday passenger charters and inclusive-tour flights from London (STN and LGW), Liverpool, Manchester, Cardiff, Birmingham, Glasgow, and East Midlands.
David Crossland is chairman, with Hugh Collinson as managing director and Harry Coe as chief financial officer. Sir Michael Bishop, chairman of British Midland Airways, Ltd., is a member of the board, along with Thomas Trickett and Tony Waslander. Orders are placed for 5 McDonnell Douglas MD-83s that arrive in early 1991 and allow the company to commence revenue operations to the Canary Islands and Mediterranean resort areas on March 18. In November, it is reported that 3 more MD-83s will be chartered.
Enplanements total 172,625 and revenues are $56.7 million. The operating profit is $7 million and the net profit is $4.1 million.
The workforce is increased a whopping 59.2% in 1992 to 449 and 3 more leased MD-83s are added. Destinations visited include Egypt, Cyprus, Algarve, Yugoslavia (before the civil war), Greece, Spain, Turkey, Tunisia, Malta, and Paris.
Passenger boardings skyrocket 89.7% to 1,675,978 while revenues advance to $140.2 million. The operating surplus is $17.5 million and net gain reaches $14.6 million.
CEO Lee’s workforce in 1993 totals 450. An unsuccessful hostile takeover bid is made for rival Owners Abroad Group’s carrier Air 2000,
Ltd. The deal is derailed as the result of an inquiry made by the U. K. Monopolies and Mergers Commission and the obstructive tactics of First Choice Holidays, which also takes a large stake in OAG.
In June, another rival operator, Cardiff-based Aspro Holidays and its in-house Inter-European Airways, Ltd. (formed in 1987) are purchased instead. The new Welsh airline acquisition is merged on October 31, contributing two A320-211s.
Customer bookings skyrocket 111% to 3,550,000.
Inter-European is absorbed in January 1994. Two of B-767-31KERs are acquired early in the second quarter and allow new transatlantic services to the U. S. and Caribbean to be initiated. During the summer, the airline flies 60% of the Airtour Group’s northern summer services. Later in the year, flights begin to Las Vegas and Sydney, Australia. During the year, the A320-211s are replaced by two chartered A320-212s.
Enplanements climb 2% to 3,620,200.
Airline employment is increased by 27.3% in 1995 to 1,162 and the company’s two main divisions are consolidated. As the tour business improves, the fleet grows throughout the year and comes to include 6 chartered MD-83s, 2 leased B-767-31KERs, 1 each chartered B-757-23A and B-757-236, 3 chartered A320-212s, 1 owned and 2 leased A320-231s, and 4 new owned B-757-225s.
While landing at Manchester on April 28 after a service from Las Palmas, Canary Islands, an MD-83, with 7 crew and 171 passengers, suffers the collapse of its main landing gear; four occupants are injured.
Passenger boardings accelerate 25.4% to 4,414,459 and freight traffic skyrockets 84.9% to 33.62 million FTKs.
The workforce grows by another 11.3% in 1996 to 1,293 and 3 MD-83 s are withdrawn. In February, the company purchases control of Copenhagen-based Simon Spies Holdings, and thus gains control of its airline subsidiary PremiAir, A. S., which is the largest charter airline in Scandinavia. Later in the year, the Carnival Corporation assumes a 29% minority stake.
A massive restructuring of the group board and corporate management occurs at the beginning of September and is announced on September 6. Sir Michael Bishop becomes board vice chairman, with Scandinavian Leisure Group Chairman Christen Sandahl the newest board member. Nonexecutive Director Trickett and Executive Director Waslander both retire.
CFO Coe moves up to become deputy CEO/managing director, while Group Controller Tim Byrne becomes deputy chief financial officer and Barry Nightingale becomes director of group treasury services. Managing Director Collinson becomes chairman of the new accommodation di vision, which includes hotels and cruise ships. Mike Lee becomes chairman of the newly created aviation division that includes both Air-tours International Airways and PremiAir, A. S.
Enplanements ascend 4% to 4,589,036 and 41.98 million FTKs are operated, a gigantic 130.3% increase.
Airline employment jumps 16.4% in 1997 to 1,505. Destinations visited from Belfast, Birmingham, Bristol, Cardiff, East Midlands, Glasgow, Humberside, Leeds/Bradford, London (LGW and STN), Manchester, Newcastle, and Teesside include Australia, Austria, Canada, the Caribbean, Cyprus, Egypt, France, Greece, the Maldives, Malta, Portugal, Spain, Switzerland, Thailand, Tunisia, Turkey, and the U. S. (principally Florida for the first half of the year on behalf of Carnival Air Lines).
After an investigation, the U. K. Monopolies and Mergers Commission issues a preliminary finding in September concerning the relationship of travel agents and tour operators. Links between the two groups, the agency reports, encourages anticompetitive behavior. On behalf of the industry, Chairman Crossland responds, pointing out that there is no collusion between the two groups, which are very competitive.
Arrangements for the acquisition of majority ownership (80.7%) of the Belgian holiday group Sun International, S. A. for ?53.5 million are completed in October. With it comes the charter carrier Air Belgium, S. A., the aircraft of which will soon be painted in Airtours colors. The Airtours Aviation Division now has a fleet of 36 aircraft.
On December 17, arrangements are completed for the lease of two Airbus A330-200s that will be delivered during the second and third quarters of 1999.
Customer bookings swell 10% to 5,055,754 and cargo traffic grows by 17.6% to 51 million FTKs.
On January 1, 1998, the tail of a B-757-23A with 8 crew and 211 passengers, impacts the ground while the plane is landing at Puerto Plata after a flight from Bangor, Maine. The airplane over rotates on landing, at which point the pilot elects to abort the landing and divert to Santo Domingo. Upon inspection it is discovered that although no one is injured, the aircraft is badly damaged.
The acquisition of 80.7% of the issued and voting shares in Sun International, S. A. is completed on January 16. The ?53.5-million cost is paid from the group’s existing cash resources. In February, a public offer is initiated for the remaining 19.3% of Sun International’s outstanding shares at the same BFr 4,900 per share price. Sun International is assigned to the group’s new West European Leisure Group, a coequal with the already established U. K. Leisure Group, Scandinavian Leisure Group, and North American Leisure Group.
Anticipating a short-term capacity crunch, Airtours, on March 8, leases the DC-10-30 that PremiAir, A. S. had withdrawn on February 18; the wide-body will be retained through the end of May.
Painted in hybrid colors, a B-747-219A, leased from Air New Zealand, Ltd., is delivered in April. It is placed into service flying charters from Belfast, Cardiff, and Manchester to the Canary Islands, the Caribbean, and to Orlando.
On May 13, the company enters the German package vacation market when it purchases a 29.03% stake in Frosch Touristik, GmbH. (FTi) for an initial cash price of DM 50 million (?17.2 million or $28.5 million). Airtours has the option to purchase the whole concern by 2002. Dietmar Gunz, Frosch founder and managing director, joins the Air-tours board while the British concern begins to make good on a pledge to invest DM 10 million in loan capital to enable Frosh to finance its short-term growth.
Direct Holidays, which sells air-inclusive and cruise tours directly to U. K. customers through various outlets, is purchased in July.
During an August 9 A320-212 service from the Canary Islands to Cardiff, an unidentified passenger acts aggressively and becomes abusive toward fellow passengers and cabin crew members. He is arrested after allegedly making bomb threats.
On September 7, Frosch Touristik, GmbH. (Frosch translates as “frog”) announces that it will set up its own airline to operate a trio of Airbus A320s, leased from Airtours International, on routes from Germany to the major Mediterranean holiday destinations. It is noted that FTi’s current contract with Britannia Airways, GmbH. for flight services, which is due to end in 2001, will be progressively scaled back even as Herbert Kracker, head of Britannia Airways, GmbH., is hired as the new airline’s operations director. It is anticipated that, beginning during the fourth quarter, Britannia Airways Germany, GmbH., which has been operating B-767-304ER services for FTi to Majorca and Malta, will restrict its flights to long-haul operations to the U. S. and Caribbean.
During the year ending on September 30, the U. K Leisure Group division carries 3.9 million passengers.
Air rage raises its ugly head again on October 30 when British passenger Steven Handy, aboard a service from the U. K. to the Canary Islands, allegedly attacks flight attendant Fiona Weir with a vodka bottle he had brought aboard. The lady requires 18 stitches and, upon landing, Handy is arrested by Spanish police and charged under Spain’s Air Navigation Act with endangering an aircraft and assault occasioning actual bodily harm. After appearing before Malaga city magistrates and posting bond, Handy is released pending trial. Twice the defendant fails to show for trial and after the second absence, the Spanish court, on November 20, issues a warrant for his arrest. In the meantime, he has been banned from travel on any British airline.
Handy is persuaded to return to Spain after having been found in an Essex pub and upon his arrival on November 23, is detained by police, who have been tipped off that he and three companions are entering the country with illegal drugs. All four are released without charge when the warning proves false. Handy is again allowed to post bail, this time for a hearing on the Weir case on December 4.
On November 25 at an undetermined time en route from Las Vegas to Manchester, one of the B-767-31KERs, with 329 passengers, sustains substantial damage to the rear cargo hold. The damage is discovered upon an uneventful landing, where several containers in the rear hold of the cargo compartment are found unsecured.
The Travelworld Group, which sells air-inclusive tours in 120 travel agencies throughout the U. K., is purchased on November 30.
The successful issue of a ?250 million ($415 million) convertible bond is completed during the first week of December. The funds generated will be employed to finance future expansion.
FTi is not able establish its short-haul airline subsidiary as quickly as anticipated during the fourth quarter and thus Britannia Airways Germany, GmbH. continues to operate to the Mediterranean on behalf of the German travel operator.
Reports begin to circulate in late December that an unnamed bidder has come forward in a series of “preliminary approaches concerning possible offers” to take over rival First Choice Holidays, all of which are “highly conditional.”
For the year as a whole, 8.5 million package holidays are sold and passenger boardings climb 9.3% to 5.52 million.
Company employment at the beginning of 1999 stands at 17,334, including 1,483 employed by the airline.
Airtours suffers another spectacular air rage incident early in the new year. While en route from London (LGW) to Montego Bay on January 31, a midair brawl breaks out at the rear of Capt. John Austin’s Flight 71, a B-767-31KER with 12 other crew and 385 passengers, at 37,000ft. Cabin crew attempt to calm the situation, but are unsuccessful. At one point, 8 stewards and stewardesses are grappling with unruly passengers and there is some possibility that the crew might lose control of the cabin. Seven hours into the service, after pleading for police back-up, Austin is granted permission to divert.
The wide-bodied holiday aircraft is met on the tarmac at Norfolk, Virginia, by FBI officers, who escort away 12 passengers—6 men and 6 women from a Lewisham, South London, extended family. Several of those thrown off the plane protest their innocence and, after questioning by local airport police and the FBI, are released. The event, including the rapid departure of the Boeing, is widely reported on evening news broadcasts in the U. S. and U. K.
The group is required to finance its own way back to England, where, upon landing, all face charges on Air Navigation Order offenses plus a possible legal action by Airtours to recover ?20,000 for fuel used in the diversion. The case is turned over for investigation to Chief Inspector Michael Alderson of the Sussex police. The London Sunday Mirror will reveal several weeks later that the group that had spent ?16,000 on their holiday had claimed ?57,000 in welfare payments over the previous year. The report causes the British Benefits Agency to launch a fraud investigation.
The rumors concerning a possible takeover by an outside source continue to circulate during the first quarter and increase by 56% the value of First Choice Holidays. Finally, the accuracy of the speculation is confirmed by First Choice on the London Stock Exchange on March 1 and revealed to the public by the on-line version of The Guardian on March 2. The media speculates that the potential bidder is thought to be Europe’s largest tour operator, Preussag, A. G. Analysts suggest that the move may not be successful, as the German concern holds a stake in rival Thomas Cook Holdings, parent of Flying Colour Airlines, Ltd., which, in turn, owns 10% of First Choice.
The Guardian notes on March 7 that the approach to First Choice had been made not only by Preussag, A. G., but by Airtours, plc, parent of Airtours International Airways, Ltd., as well. First Choice shares have soared 27p each in value over the last week. In a brilliant stroke, Airtours Chairman David Crossland is able to persuade
Preussag to sell its remaining 10% stake in First Choice and remove itself from the bidding process.
Displeased with the manner in which Airtours has represented her case and the fact that her alleged assailant, Steven Handy, has yet to be tried by a Spanish court, flight attendant Fiona Weir quits Airtours and is hired on at rival Flying Colour Airlines, Ltd. Indeed, as a result of certain elements in the handling of the case, Ms. Weir files suit against Airtours on March 8. On March 15, Airtours raises its stake in Frosch Touristik, GmbH. from 29.03% to 35.92%; the stake of FTi founder Gunz falls from 23.04% to 19.67%, with private investors holding the remaining stock.
On April 19, First Choice Holidays Chairman Ian Clubb warns Air-tours not to continue its attempt at a hostile takeover with a bid now valued at ?852 million. Such a “reckless gamble” is certain to require at least six months of regulatory agency investigation while corporate profits would be badly damaged by the uncertainty of a review during the peak summer trading period.
On April 30, it is reported that Airtours has officially made its hostile takeover bid for First Choice Holidays during the day and that Chairman Crossland has elected to avoid hearings by U. K. competition agencies by appealing directly to the European Commission, which has final jurisdiction. Crossland has been careful, over the preceding months, to make certain that Brussels has received extensive draft submissions prior to the actual bid launch.
It is also noted that rival Thomson Holidays, parent of Britannia Airways, Ltd. and Britain’s largest travel group, is planning a price war designed to dilute any value of an Airtours-First Choice merger. The counter offensive will bring something of a revolt among Thomson shareholders, many of whom would rather accept a number two listing than suffer large financial losses.
Concerned about the possible creation of an operator with more than a total of the U. K. travel market, the Association of Independent Tour Operators on May 1 petitions the U. K. and European Union competition authorities to disapprove any hostile takeover of First Choice by Airtours.
Upon arrival at Palma, Majorca, on a late night Airtours service from Glasgow on May 1, Glen Morrison and Patrick McCarron are taken in hand by Spanish police after an airline flight attendant complains that the two had been caught smoking in their plane’s toilet. As smoking is illegal, both men have their passports seized and their return tickets are torn up. Both are forced to arrange alternative flights home at their own expense, even as their families return home with Airtours. Both men protest their innocence.
Employing three leased German-registered A320-231s in livery similar to that of Airtours, Fti Fluggesellschaft, GmbH., doing business as Fly Fti, GmbH., begins revenue operations on May 1. The Frosch Touristik, GmbH. subsidiary operates from Munich to the 18 major Mediterranean vacation destinations in 11 countries previously visited on its behalf by Britannia Airways Germany, GmbH.
The Guardian reports on May 9 that early signs are that an Airtours decision to bypass U. K. regulators and apply directly to the European Commission for approval of its First Choice takeover will be successful. This despite an expected negative submission from U. K. competition authorities expected to arrive in Brussels during the following week.
Air rage problems continue. While en route from Orlando to Manchester on May 10, a B-767-31KER, with 205 passengers aboard, must be diverted to Bangor, Maine. Intoxicated passenger Bryan J. Neal, who has broken an interior window in the first-class section of the jetliner and assaulted a fellow passenger attempting to intervene, is restrained before he is able to break the exterior glass. When the plane lands, Bryan is handed over to the FBI; the next day, he pleads guilty in U. S. District Court to interference with a flight crew and is sentenced to prison.
By the last week of May, Airtours has received backing for its takeover from 51% of the First Choice Holidays shareholders.
On May 26, the U. K. Department of Trade and Industry announces that it will not review the First Choice takeover on competition grounds and will not ask the European Commission for authority to undertake a separate investigation.
Rather than rubber-stamp the arrangement, the EC, on June 3, indicates that the deal will be subjected to an in-depth investigation that could last until October, and may well result in its denial on competition grounds. As Airtours becomes aware of its own growing first half losses, it withdraws its bid for First Choice on June 10.
With receipt of the first two (of four) A330-243s six days later, Airtours becomes the second U. K. charter operator to introduce the long-range Airbus. Following a brief workup, the new jetliner operates its first revenue service on June 27 from Manchester to Montego Bay, Jamaica. The remainder of the A330-243 order is still scheduled to arrive in October-November. It is revealed on June 30 that the hostile takeover bid for First Choice has so far cost the concern ?2.8 million.
On July 26, Airtours receives a 36-page European Commission document that outlines its objections to additional holiday travel industry consolidation.
It is reported in the October issue of Airways (published in August), that the second pair of A330-243s will, upon their delivery in the fall, be transferred to Premiair, A. S. At this point, it is also expected that Air-tours International, according to a July announcement, will adopt the Premiair moniker.
On September 23, new EU antitrust commissioner Mario Monti, shoots down the Airtours takeover of First Choice Holidays. Although Airtours drops the bid for its rival, it does, however, formally appeal the ruling on December 2, charging that, by failing to recognize the industry’s competitiveness, the regulator’s ruling is flawed and should not stand as precedent.
Passenger boardings for the year dip 0.9% to 5,531,000, while
5,257,000 FTKs are operated. On revenues of ?1.43 billion, the year’s net loss of ?75.3 million more than doubles the tour operator’s failure the previous year.
The company, on May 16, sells its 3% stake in First Choice Holidays. Later in the month, the company confirms that it is in merger talks with LTU International Airlines, GmbH.
German tour operator Frosch Touristik FTi, in which Airtours already holds a minority interest, is fully acquired on July 14 for ?24.5 million ($38.5 million).
Unhappily, attention must instead be given to stemming the losses at FTi and so, on August 9, Managing Director Jim Byrne announces that Airtours must quit the LTU negotiations.
As Premiair, A. S. receives its 3 A330-343Xs during the fall, the DC-10-30s previously employed are turned back to Airtours for seasonal flights.
AIRTRAN AIRWAYS/AIRLINES: 6280 Hazeltine National Dr., Orlando, Florida 32822, United States; Phone (407) 859-1579; Fax (407) 856-5867; Http://www. airtran. com; Code FL; Year Founded 1994. On October 1, 1993, negotiations are completed for the takeover of the new Ft. Lauderdale-based charter operator Sun Express Airlines by AirTran Corporation, the parent of Mesaba Airlines, and plans are made to turn it over to a new subsidiary, Conquest Sun Airlines.
The $2.5-million purchase of Sun Express Airlines, now Conquest Sun Airlines, along with its certificate and 2 Boeing 737-200s, 1 Dash-214 and 1 Dash-297A, is completed in May 1994. The arrangement is immediately condemned by the pilots’ union of Northwest Airlines, which correctly points out that the purchase violates their scope clause in the collective bargaining portion of the major’s contract with Mesaba Airline’s parent AirTran Corp.
In June after AirTran charter flights commence, Northwest Airlines, concerned by both the Air Line Pilots Association charge and fear of a loss of jet traffic, threatens to withhold some $894,000 in prorate payments to Mesaba Airlines if a resolution of the Conquest Sun Airlines issue is not immediately forthcoming.
AirTran Chairman Robert D. Swenson unveils a plan in August which, as soon as certain tax and legal problems are resolved with
Northwest Airlines, will result in the spin off of Conquest Sun Airlines to AirTran stockholders. This is completed and, on September 7, the wholly owned subsidiary is reformed into AirTran Airways. John Horn becomes president/CEO. The dispute with Northwest Airlines is not yet entirely resolved as officials from the AirTran and the major continue discussions.
From a base at Orlando, services—begun earlier as nonscheduled— are converted to scheduled flights made five days a week by the 40-employee firm on October 6. Company Boeings, flying under the “FL” flight code first used by Frontier Airlines (1), visit destinations Providence, Hartford, Cincinnati, Omaha, Syracuse, Nashville, Albany, Dallas (DAL), Greenville, Norfolk, and Newburgh, plus Huntsville, Birmingham, and Knoxville.
Boardings for the start-up month of October total 5,977, climbing to 10,224 by the end of November. A B-737-22E1A is delivered in December as enplanements for the year’s final quarter reach 29,480. Revenues are $2.43 million, but expenses are $5.21 million. Consequently, there is an operating loss of $2.76 million and a net loss of $1.51 million.
It is announced on March 8, 1995 that, following eight months of talks, officials from AirTran and Northwest Airlines have reached an agreement on the dispute stemming from AirTran Airways foray into jet passenger service. NWA will increase its stake in AirTran from 2% to almost 30% while AirTran’s jetliner service will be spun off into an entirely separate concern, AirTran Airways, Inc., on August 31.
The company suffers losses of $3.12 million at the end of the first quarter and $334,000 at the end of the second.
Plans for fleet enhancement and route expansion proceed while the creation of an independent parent, Airways Corporation, is accomplished by September 1.
Meanwhile during the year, the fleet comes to comprise 6 owned “Baby Boeings,” including 3 B-737-2l9As and 1 each B-737-222, B-737-2E1A, and B-737-2P6A. A leased aircraft, a B-737-214, also enters service. Frequencies to Knoxville are increased to six per week, and is the also number of roundtrips introduced to Providence and Syracuse.
The NWA arrangement and added capacity assure that AirTran is able to increase its traffic and enplanements for these 12 months reach 438,017. Costs exceed operating income for the year as a whole and there are losses: $3.2 million (operating) and $2.83 million (net).
The employee population is increased by 27.2% in 1996 to 473. Two more leased small Boeings are acquired during the last week of January, one each B-737-2T4A and B-737-297A. When six-times-a-week round-trip service to Akron, Canton, Allentown, and Rochester begins on February 1, the total number of cities in the route network reaches 21. On July 17, Airways Corporation names Robert Swenson as its chairman/ CEO, to the additional posts of president/CEO of its AirTran Airways unit, succeeding the retired John Horn.
Customer bookings skyrocket 126.2% to 1,078,822. Revenues increase 113.2% to $98.78 million, but expenses soar 122.4% to $110.14 million. The reverses on the bottom line deepen as both an $11.36-million operating and $6.52-million net loss are suffered.
Company executives join with their colleagues from Comair on May 1, 1997 in signing a letter of intent to enter into a code-sharing agreement that will connect the two carriers’ service through Orlando. The arrangement, when completed, will cover AirTran’s 23 cities as well as Comair’s 9-stop Florida network.
On July 1, officials of Valujet Airlines, having decided that they cannot return the company to profitability under its current identity, sign an agreement to merge with the AirTran Airways parent, Airways Holdings. Pending all necessary approvals that will be received, the union will occur within three months of July 10, 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. Val-ujet, which will have $139 million to bring into the deal from its more successful era, will be joining a carrier with a solid safety record and no history of accidents or incidents.
Valujet’s President Corr will become CEO of the enlarged operation, which will operate a fleet of 40 Boeing 737s and DC-9s. Valujet chairman Lewis Jordan will relinquish his role and serve as a board member and consultant; as Valujet’s second largest shareholder with 5.5 million shares, he will continue to have a vested interest in the success of the merger.
Service is inaugurated on September 3 from Islip to Boston and Orlando. On September 24, Valujet Airlines officially changes its name to AirTran Airlines. New president Corr unveils the airline’s changes, introduces a new business-class service, featuring two-by-two seating, displays the new corporate livery, and announces a number of other product and service enhancements, including preassigned seating and nationwide distribution of seats through travel agents.
Corr also outlines a code-sharing agreement with merger partner Air-Tran Airways. Simultaneously, thrice-daily nonstop roundtrips commence between Houston (HOU) and Atlanta.
The company introduces X-Fares on October 22; these allow people aged 18-22 to fly standby on its nonstop flights for $35 one-way.
Despite lobbying efforts by USAirways, Delta Air Lines, and Trans World Airlines (TWA) to keep discount airlines out of New York (LGA), the U. S. DOT on October 24 grants AirTran Airlines, AirTran Airways, and three other small carriers special permission to share 31 slots at New York (LGA) and Chicago (ORD).
In early November, shareholders of Valujet, Inc., parent of the airline, approve the merger and the renaming of their holding company. The same occurs with the owners of AirWays Corporation. When the union is completed at month’s end, the new holding company, AirTran Holdings, Inc., will operate two wholly owned subsidiaries, AirTran Airlines and AirTran Airways. The combined carriers will initially serve 45 cities and operate a fleet of 42 aircraft, comprising 31 DC-9-32s and 11 B-737s, with 227 peak daily departures.
All of the carrier’s aircraft offer the new business coach section beginning on November 22. By the end of the month, all of the old Valu-jet livery has been painted over with the new AirTran Airlines colors; each aircraft now wears a large “a” on its tail, which President Corr indicates stands for “affordable.” Repainting of the B-737 fleet will continue into the spring and summer of the new year.
Twice-daily B-737 nonstop return flights between Knoxville and New York (LGA) commence in December 15. At the same time, four daily roundtrips commence to New York (LGA) from Atlanta.
On Christmas Eve, the company sponsors a 12-hour performance of minstrels, clowns, jugglers, and other entertainers at Concourse C at Atlanta.
Senior Vice President/Chief Financial Officer Stephen C. Nevin resigns on December 31.
Passenger boardings for the Valujet operation decline 6.1% to 2,821,000, while operating revenues fall 9.8% to $198.07 million. With expenses up 13.2% to $290.9 million, the operating loss reaches $92.91 million. The net loss is $86.83 million.
Customer bookings for AirTran Airways final year are up 1% to
1,086,000 while operating revenues reach $105.59 million. With expenses of $118.01 million, the operating loss is $12.42 million and the net downturn reaches $15.34 million.
The flight schedules of AirTran Airways and AirTran Airlines are combined in January 1998 under the AirTran Airlines marketing name. The carrier will continue to operate as two companies (with two FAA certificates), but employing the single FL code. As part of this route system integration, a number of new services are offered.
The Sunday January 11 edition of the Cleveland Plain Dealer reports that a recent FAA inspection of the airline had found numerous serious safety violations. The next day, President Corr holds a news conference in which he reports that the review had uncovered “no airworthiness problems” and that the newspaper had gained its information from incomplete and preliminary government data. He thereafter calls upon the Ohio newspaper to retract the story or face legal action. The dispute will be resolved short of either measure.
Beginning on February 16, the company reinstates over 60 midweek flights between Atlanta and 15 cities. It also adds one daily nonstop round-trip between Atlanta and Ft. Myers, New Orleans, and West Palm Beach.
On March 1, thrice-daily flights are started between Atlanta and Dayton, twice-daily flights begin between Atlanta and Knoxville, and daily service commences from Atlanta to Bloomington, Illinois. Nonstop flights are simultaneously increased between Atlanta and Boston, Mobile, and Savannah.
On the same day, service is discontinued between Orlando and Omaha, Kansas City, Norfolk, Toledo, and Cincinnati.
Company officials at Atlanta announce an expanded frequent flyer program on March 16.
Flights are added on April 1 between Atlanta and Buffalo, Greensboro, N. C., and Richmond, Va.
Beginning on May 1, one additional daily roundtrip is added from Atlanta to Boston, Chicago, Newport News/Norfolk, and Raleigh-Durham. With these new services, AirTran serves 38 cities with 283 peak daily departures.
En route from Atlanta to Chicago on May 7, Flight 426, a DC-9-32 piloted by Vietnam War veteran Capt. Benton West and with 90 other passengers, encounters hail and high winds over north Georgia that tear away the nose cone and smash the cockpit window and some instruments. ATC at Lovell Field, Chattanooga, is able to talk the crippled jetliner into a safe landing, from which two people are sent to hospital with minor injuries. The dramatic landing is caught on home video and is first shown over WTVC-TV before being broadcast nationwide.
Thrice-daily DC-9-32 roundtrip service is inaugurated on May 18 between Bradley International Airport at Hartford/Windsor Locks, Connecticut, and Atlanta. Simultaneously, one additional daily flight is added (except on Saturdays) between Atlanta and Bloomington/ Normal, Illinois.
Richard Schroeter is now appointed senior vice president/chief financial officer.
For lack of performance, Mobile is dropped from the route network on May 31. The next day, a fourth weekly nonstop roundtrip is initiated from Atlanta to Akron-Canton Regional Airport in Ohio.
It is announced on June 12 that the company has completed the installation of business class seating in all of its aircraft.
Nine more aircraft join the fleet in July and August.
Having worked with company management and the Association of Flight Attendants (AFA) since March 1997 on efforts to arrange a new contract for the carrier’s 400-plus flight attendants, the National Mediation Board (NMB) declares negotiations at an impasse on August 5.
The next day the NMB offers to submit the outstanding issues to binding arbitration, a move that the union accepts, but the carrier rejects. At this point, both sides enter into a mandatory 30-day “cooling off’ period, after which the flight attendants will be free to strike and the company may impose a contract.
Negotiations between the AFA and management resume on September 2, even as uniformed flight attendants conduct informational picketing outside company headquarters and at Orlando. If a contract is not signed, members plan random work stoppages, but that need does not arise when a settlement is reached.
In mid-September, the company dramatically increases its departures from Atlanta. On September 9, the number of daily nonstops to Orlando grows from 10 to 11; to Washington, D. C. (IAD) from 8 to 9; to Buffalo from 2 to 3. The same day, new thrice-daily roundtrips commence to Quad Cities/Moline, Illinois.
At the same time, flights are ended from Atlanta to Allentown, Des Moines, Islip, Syracuse, and West Palm Beach.
New four-times-a-day nonstop roundtrips commence on September 16 from Atlanta to Miami while new nonstop roundtrips to Newark begin on October 1, five times a day. During the month, it is realized that business expansion during the fourth quarter will slow. Consequently, two B-737s will be retired when their leases end and a number of workers in Atlanta will be laid off.
Just after takeoff from Atlanta on a November 1 service to Dallas (DFW), Flight 867, a B-737 with five crew and 100 passengers, suffers hydraulic problems. The flight returns to its point of origin, but after landing, control is lost and the landing gear collapses. A total of 11 passengers receive minor injuries.
Enplanements between January and December total 5,462,827, a giant 81.7% increase over the combined totals of the previous year. Revenues skyrocket 107.8% to $439.3 million and expenses are up 46.2% to $457.9 million; consequently, there is an operating loss of $18.55 million and a net $40.73 million downturn. The net loss is less than half the previous year’s deficit.
Having successfully led the airline through its restructuring process, CEO Corr returns to his other businesses in Houston at the beginning of January 1999. In his place, Allied Signal executive Joseph B. Leonard is elected chairman/CEO/president on January 6.
Service to Richmond, Virginia, ends on January 11. During the month, AirTran receives the 1998 award from Entrepreneur magazine for “Best Domestic Low-Fare Airline.”
The company receives an FAA award on February 3 for its participation in the agency’s aviation maintenance technician safety training program.
Painted in the distinctive AirTran livery and with a complete airline interior, the carrier’s first B-717-2BD makes its maiden flight on February 24 from Long Beach Municipal Airport. AirTran is launch customer for the 106-passenger short-haul jetliner, but because of developmental problems with its Rolls-Royce BR715 engines, deliveries of the first two aircraft must now be postponed until September. Pilot training for company aviators will begin in July.
The next day, it is announced that the company’s 1999 business plan has been put in place; its three major goals are to reduce costs, conserve cash, and shore up liquidity.
On March 4, the company informs the press that, through May 31, it will upgrade customers to business class for just $25 over any fare.
Daily nonstop return service is initiated on March 15 from Gulfport/ Biloxi to Dallas (DFW), Houston (HOU), Nashville, Ft. Lauderdale, Tampa, and Atlanta. Simultaneously, a seventh daily nonstop roundtrip is offered from Atlanta to Tampa, and an eighth nonstop return service from Atlanta to Chicago (MDW). With over 130 daily departures, AirTran is now the second largest carrier (after Delta Air Lines) serving Atlanta,
Former Northwest Airlines and USAirways executive Robert L. Fornaro is elected president on March 24; Chairman Leonard retains that post and continues to also serve as CEO. Fornaro accepts the presidency on March 31 and the change becomes official.
Under terms of a joint marketing partnership entered into with Beau Rivage Resort on March 16, AirTran, on April 1, launches daily return service in support of the new complex from Orlando to Gulfport/Biloxi.
Other new management additions include Senior Vive President-Customer Service Marilyn L. Rogers and Vice President Operations Stephen J. Kolski; Thomas Kalil, the former senior vice president operations, becomes a special project consultant.
Chairman Leonard reports on April 15 that Atlanta’s second largest airline has earned a modest $3-million first quarter profit, compared to a $7.9 million loss the year before. Additionally, cash reserves, which had dwindled to $24 million at the end of 1998, had been rebuilt to $58 million by the end of March, thereby lessening any threat of a liquidity problem.
After less than a year on the job, Senior Vice President/Chief Financial Officer Schroeter resigns on May 5; he will remain on through the end of June before returning to Minneapolis to be with his family.
Following on the heels of the May 13 DOJ antitrust suit against American Airlines, AirTran, on May 26, charges Delta Air Lines with matching its fares and adding flights in an effort to drive AirTran out of the major’s markets and thereafter raise fares. AirTran executives, who claim to have been working on their brief before the May 13 American suit, cite a number of incidents to back up their claims, but indicate they are not going to file a lawsuit or seek specific remedy. Rather, the discount carrier’s leaders ask that DOJ and DOT review Delta’s practices. In a strongly worded response, Delta indicates that the AirTran charges are “insulting and untrue.”
A fourth daily nonstop roundtrip service is added on May 16 between Atlanta and Greensboro, High Point, and Winston-Salem. Simultaneously, a fifth daily nonstop roundtrip is started from Atlanta to Jacksonville.
On May 24, employing company pilots, flight attendants, mechanics, and service personnel, the first production-configured B-717-2BD, painted in AirTran colors, begins a 10-day “Pre-Aircraft Certification Airline Simulated Operation” that will take it to 25 airports in 12 states on the route network. The test is designed to give the airline in-service experience with the new aircraft before its September delivery.
Wearing the colors of launch customer AirTran, a B-717-2BD participates in this year’s Paris Air Show. Afterwards, it makes a 10-city customer tour of cities in Europe.
A fifth daily B-737-269A roundtrip is inaugurated on June 16 between Atlanta and New Orleans.
On July 1, President Fornaro assumes the additional post of CFO. On the same day, the company initiates new nonstop roundtrips from Atlanta to Newark four-times-a-day.
A fifth daily nonstop roundtrip is added on September 7 between Atlanta and Philadelphia.
AirTran takes delivery of its first B-717-2BD on September 24 and the second a few days later. After successfully completing a week of route proving evaluations, the two smoothly enter the airline’s system. The premier revenue service on October 12 is operated over a daily route from Orlando to Atlanta, Dallas (DFW), Washington, D. C. (lAD) and back to Orlando, while the second plane flies the next day from Orlando to Ft. Lauderdale, Dallas (DFW), Chicago (MDW), and returns to Orlando.
On October 14, frequencies are boosted between Atlanta and both Miami and Ft. Myers. One more flight is added from the Georgia hub to Dayton the next day.
Route rationalization, which has been underway for some months, continues, as the company withdraws from Knoxville and ends several non-717 services from Orlando. It does, however, start flying to Newark.
Meanwhile, a private $179-million EETC placement is made to cover financing for the first 10 B-717-2BDs. It is reported that a totally revamped website is bringing in 17% of company sales by year’s end.
Passenger boardings overall surge 18.3% to 6,461,000. Parent AirTran Holdings reports operating income of $503,828,000, up 14.7%, and costs of $447,721,000, up 4%. The operating profit leaps to $56,107,000 while the previous year’s net loss becomes a $29,755,000 net gain.
Airline employment stands at 3,882 at the beginning of 2000, an 11.6% increase over the previous 12 months.
As sufficient B-717-2BDs join the fleet, the company, during the first quarter, is able to retire its remaining B-737s and to begin removal of its DC-9-32s.
On March 1, daily B-717-2BD return service is launched from Philadelphia to both Ft. Lauderdale and Orlando; the same day, twice-daily DC-9-32 roundtrips are launched from Atlanta to Myrtle Beach.
The South Carolina frequency becomes thrice daily on April 1, the same day twice-daily return service is begun from Philadelphia to Tampa.
One daily flight is added on May 10 from Atlanta to Houston, Myrtle Beach, and Savannah and from Philadelphia to Myrtle Beach.
In May, AirTran renegotiates its purchase agreement and delays delivery of 10 B-717-2BDs from 2001-2002 to 2003. The manufacturer, which has not sold many of the small jetliners and needs to facilitate sales, agrees to provide 18-year operating leases for the carrier’s next 20 units. Still, with 10 already in service, AirTran is the largest operator of the type in the world.
Employing a B-717-2BD, the Atlanta-Chicago (MDW) route is extended to Minneapolis on June 10, four times daily. Another daily flight from Atlanta is also added to both Gulfport and Biloxi and to Newark.
Following disclosure in the Wall Street Journal and the Atlanta Journal-Constitution, Airtran confirms on June 16 that it is, and has been, in merger talks with Trans World Airlines (TWA).
The merger discussions with TWA end on July 1. Also in July, a PROS revenue management system is turned on.
During the remainder of the summer and into the fall, the last 4 B-737s are withdrawn and phaseout of the DC-9s continues with 1 older plane withdrawn for every 2 of the new B-717s delivered.
Although the carrier has experienced a number of operational incidents since its change from ValuJet Airlines, one of the most serious occurs on August 8.
The pilots of Flight 913, a DC-9-32 with 5 crew and 56 passengers that has just taken off from Greensboro on a service to Atlanta, discover smoke in the cockpit. As the acrid smoke spreads into the passenger cabin, the flight deck must determine whether it is best to continue on and make an emergency landing at Piedmont Triad International Airport, to turn back 15 mi. to Greensboro, or to try to put the plane down on a highway. The middle course is chosen; the aircraft is safely landed and all aboard evacuate via chutes. Several people are treated for minor injuries and smoke inhalation.
Other than several new Florida nonstops, the company’s expansion is now limited to filling in holes in its East Coast route network from Atlanta. For example, thrice-daily DC-9-32 roundtrips to Toledo commence on October 3.
On October 6, Grand Casino pulls out of the arrangement that it shares with Beau Rivage to underwrite gambling flights made by Airtran into Gulfport and Biloxi from Atlanta, Tampa, Ft. Lauderdale, Dallas (DFW), and Houston.
On October 12, the company celebrates the first anniversary of its B-717-2BD operations with the delivery of its 13th small Boeing.
Daily B-717-2BD return flights begin on December 12 from Atlanta to Freeport, Grand Bahama Island. This is the carrier’s first international route. The same day, new return service is launched thrice daily from Pittsburgh to New York (LGA) and Chicago (MDW) and twice daily to Atlanta. The company’s 34th destination, Pittsburgh is the first city other than Atlanta from which the airline has inaugurated new flights.
AIRTRANSIVOIRE (SOCIETE AIRTRANSIVOIRE, S. A.): Ivory Coast (1973-1995). ATI is formed by A. Barnoin at Abidjan in July 1973 to provide domestic and international passenger charters. Equipped with a fleet of Cessnas ranging in size from 402s to 310s and one Douglas DC-3, the 25-employee company enplanes some 4,000
5,000 passengers per year. The Douglas is withdrawn at the end of the 1980s and replaced with a Partenavia P.68B.
Operations cease in 1995.
AIRUMBRIA, S. p.A.: Aeroporto S. Egidio, Loc S. Egidio, Perugia, 0680, Italy; Phone 39 (75) 592-8084; Fax 39 (75) 5928087; Http://www. krenet. it/assindpg/airumbria/welcome. html; Year Founded 1996. Airumbria is set up at Perugia (located between Rome and Florence) in 1996 to offer scheduled passenger services to smaller communities in central Italy. Teresa Spoletini is president and revenue services commence and continue with a single Douglas DC-3.
World History
