CARNIVALAIR LINES: United States (1989-1997). At the instigation of former El Al Israel Airlines, Ltd. executive, Reuven Wertheim, and CCL’s majority shareholder, Theodore Arison, the charter carrier Majestic Airlines is reformed into this new subsidiary in 1989 and renamed. (Majestic was formed from the assets of bankrupt Pacific Interstate Airlines in 1988 and owned by Ft. Lauderdale-based Carnival Cruise Lines.)
Under the direction of Chairman Wertheim and President Daniel Ratti, Carnival’s single Boeing 727-51 is repainted and employed to help cruise passengers make rendezvous with the company’s holiday steamships. Scheduled services are now initiated linking the carrier’s Miami base with cruise ship destinations in the Caribbean, especially its Crystal Palace in Nassau, as well as New York, Islip, Ft. Lauderdale, Newark, Santo Domingo, Puerto Plata, and Santo Domingo.
Although passenger traffic figures are not released, the company makes known that its airline division has earned revenues of $17.1 million. Costs are high and the losses are $162,880 (operating) and $183,038 (net).
The company is acquired outright by Theodore Arison’s son Mickey Arison in 1990. The new owner, chairman of the Carnival Corporation, retains Wertheim as the airline’s chairman and openly pledges that his airline will henceforth function as neither a division nor subsidiary of his Carnival Cruise Lines. Just 90 days after inaugurating services to the Dominican Republic, it is found that the island is too seasonal to be profitable; Carnival reverses course and pulls out.
Enplanement figures are released and show a total of 316,956. Revenues advance 101.9% to $34.49 million, expenses rise 94.7% to $33.59 million, and operating income is $900,498. Net gain climbs to $383,358.
The fleet in 1991 totals 3 each B-727-100s and B-727-200s. Plans are made at year’s end to offer scheduled service from the northeast’s underserved airports to Florida, replacing capacity lost by the failure of Eastern Air Lines.
Passenger boardings shoot up by 56.7% to 732,000, but freight is down by 35.2% to 183,000 FTKs. Revenues surge 53.8% to $53 million, but rising costs bring an operating loss of $2.3 million and a net downturn of $5.1 million.
Company employment is increased a spectacular 98.1% in 1992 to 634 and the fleet is increased by the addition of 1 B-727-200, 4 B-737-200s, and 1 B-737-400. From Ft. Lauderdale, the company continues to fly to Islip, New York, and Newark. Operations are also conducted from Miami to San Juan, Santo Domingo, and Puerta Plata and from New York (JFK) to Miami.
Customer bookings increase 43.9% to 1,046,442 and a total of 88,000 FTKs are operated. Revenues jump 67.8% to $88.48 million, expenses climb 50.5% to $82.86 million, and operating income is $5.61 million. There is a $3.08-million net profit.
The payroll grows another 17.4% in 1993 to 723. Chairman Wertheim and President Daniel Ratti operate a fleet comprising 7 Boeing 727-200As, 4 B-737-200s, and 4 B-737-400s. Orders are outstanding for 1 each B-737-400 and Airbus Industrie A300B4.
Early in the year, the company joins with the Spanish national airline, Iberia Spanish Airlines (2) (Lineas Aereas de Espana, S. A.), to petition the U. S. DOT for permission to code-share flights from Miami to New York, Chicago, New Orleans, Los Angeles, and Houston. The arrangement calls for the Spanish flag carrier to purchase blocks of 150 seats per Carnival flight. Authority is granted on June 11 and all but the New York are new destinations for the cruise line’s airline.
On October 1, Iberia Spanish Airlines (2) (Lineas Aereas de Es-pana, S. A.) drops its thrice-weekly service from Madrid to Los Angeles. The first trial code-shared flight with the Madrid-based major, from Miami to Los Angeles, is completed on October 11 employing an A300B4 leased from Viasa (Venezolana Internacional de Aviacion, S. A.).
Later, a B-767-284ER of LanChile Airlines (Linea Aerea Nacional Chile, S. A.) is employed on an interchange basis. Following completion of the wide-body’s overnight service from Santiago to Miami, it is taken over by a Carnival crew that flies it on to New York (JFK); in the evening, Carnival operates a return flight to Miami.
During the year, the fuselage of the carrier’s first B-727-51, which has been sold out of service, is sunk to become an artificial reef off the southeastern Florida coast. Also, a maintenance base is established in a former Eastern Air Lines hangar at Miami (MIA) and a fifth anniversary celebration is held aboard the sister corporation’s newest cruise ship, the Sensation.
On December 3, daily (except Saturday) roundtrips are inaugurated from Ft. Lauderdale to White Plains, New York; 15 days later, daily flights begin to and from Worcester, Massachusetts.
Passenger boardings ascend by 5.2% to 1,067,797 and freight skyrockets 104.4% to 2.12 million FTKs. Revenues swell 39.8% to $123.74, expenses rise 43.4% to $118.92 million, and operating profit slips to $4.82 million. Net gain rises slightly to $3.75 million.
Airline employment is increased 24.5% in 1994 to 900. Following receipt of DOT authority on February 4 Carnival acquires an A300B4, formerly operated by Eastern Air Lines, under lease from Iberia Spanish Airlines (2) (Lineas Aereas de Espana, S. A.), as the two carriers begin to regularly code-share Miami to Los Angeles service.
The Airbus was originally to have been provided by Viasa (Vene-zolana Internacional de Aviacion, S. A) and had even been painted in Carnival colors; however, that arrangement falls through. On June 23, service is inaugurated from Orlando to Islip, Ft. Lauderdale to San Juan, and West Palm Beach to New York (JFK). During the summer, B-737 pilots are trained for Air Ukraine.
During the fall, the airline introduces the world’s first frequent flyer program for dogs and cats; for every 10 roundtrip flights an animal makes, accompanied by a fare-paying owner, the animal receives a free roundtrip ticket. The same provisions apply to humans not owning pets.
The airline becomes the official carrier for the Miami Heat professional basketball team. A B-737-201, painted with the team’s logo and markings, is dedicated to transporting the players to and from their games. At the end of December, Carnival is the largest scheduled passenger airline based in Florida and plans are made to replace the Lan-Chile Airlines (Linea Aerea Nacional Chile, S. A.) connection with a LADECO (Linea Aerea del Cobre, S. A.) arrangement.
Customer bookings for the year move ahead by 29.4% to 1,399,000 and 6.09 million FTKs are operated. Revenues increase 35.4% to $199.29 million, while expenses grow 38.3% to $195.3 million. The operating surplus declines to $3.91 million and the net gain slides to $2.15 million.
The workforce stands at 1,300 in 1995, a 44.4% increase. The Lan-Chile Airlines (Linea Aerea Nacional, S. A.) agreement ends in February, but a new code-sharing agreement is almost immediately signed with LADECO (Linea Aerea del Cobre, S. A.). Prior to its inauguration, the U. S. carrier employs one of its B-737-225s to provide connecting “USAir Express” service on behalf of the Chilean line between Miami, Washington/Baltimore, and New York. Dual-designator service with LADECO officially begins on April 28 over the route and is provided daily by a CAL A300B4 wearing “USAir Express” colors.
Daily nonstop scheduled service begins on June 23 between New York and Nassau. During the summer, passengers presenting airport ticket agents with a wedding certificate less than 60 days old are granted an automatic class upgrade. In August, partner LADECO (Linea Aerea del Cobre, S. A.) is taken over by former partner LanChile Airlines (Linea Aerea Nacional, S. A.). Contact between LanChile and Carnival is, by necessity, resumed.
During the fall, the maintenance hangar is closed down at Miami (MIA) and repair and overhaul work is moved to the former Federal Express building at Ft. Lauderdale Airport.
When the winter vacation schedule begins in October, two B-737-4Q8s are leased from the Turkish operator Pegasus Airlines (Pegasus Hava Tasimaciligi, A. O.) and are sent to Miami wearing a hybrid color scheme.
A code-sharing agreement is initialed with SAETA (SA Ecuatori-anas de Transportes Aereos) in November covering several services out of Miami. When Pat Riley transfers from the New York Knicks to become head coach of the Miami Heat, he finds the team plane inadequate. As a result, the previous aircraft is replaced with a B-727-225 similarly painted.
In December, service is inaugurated from Ft. Lauderdale and West Palm Beach to Hartford; from West Palm Beach to New York (JFK); from Ft. Myers to Islip; and from Newark (EWR) to Nassau.
Enplanements accelerate 39.2% to 1,948,000 while cargo skyrockets a remarkable 511.9% to 37.26 million FTKs. Revenues well exceed costs and allow the company to enjoy an operating gain of $7 million and to post a net $4.47-million profit.
The employee population is increased by 23.1% in 1996 to 1,600 as the 2 B-737-4Q8s from Pegasus Airlines (Pegasus Hava Tasimaciligi, A. O.) are retained.
In January, LanChile’s B-757-2Q8 is dry-leased and employed to open a new dual-designator service with Carnival from Miami to Punta Cana, Dominican Republic, over the existing LanChile route that continues on to Santiago de Chile.
Martin R. Shugrue, principal in an effort to launch a new Pan American World Airways (2), reaches a tentative agreement on July 17 to buy CAL for a price that includes $100 million in cash and about half of Pan Am’s stock. If consummated, the arrangement would, by use of CAL’s papers, give the new Pan Am the necessary certificates to immediately begin flying again.
Also during the month, the carrier petitions the DOT for three weekly frequencies to Peru over a route from Ft. Lauderdale and Miami to Lima.
Two weeks later, on August 1, Carnival Chairman Wertheim calls off the tentative agreement with the new Pan Am, stating that he and Shugrue have been unable to come to terms for what would essentially be Carnival’s sale.
The DOT, on August 16, fines Carnival $10,000 for its failure to disclose the passenger facility charge in an ad promoting fares from Miami to New York. Payment of half the fine must be made immediately; however, the government agrees to suspend the remainder in a year if the airline commits no further violations.
On August 17, an A300B4 flight from Newark to Puerto Rico returns to its point of origin shortly after takeoff when a passenger finds a note warning that the plane is going to explode. An intensive search is made, no bomb is found, and the plane lands safely, where another search is conducted, still without finding an explosive.
On September 15, Carnival and Paradise Island Airlines enter into a five-year code-sharing agreement under which the latter cancels its participation in the “USAir Express” program, while adding more flights in cooperation with the potential Pan Am-2 merger partner. During the fall, CAL becomes the first low-fare carrier to offer cyber-fare deals over the World Wide Web.
Under the five-year, block-seat, dual-designator pact of September 15, Carnival and Paradise Island on November 15 increase the number of flights between Florida and Paradise Island, a Bahamian resort island. Paradise also adds connecting service from Ft. Lauderdale to Key West, from Miami to Ft. Myers, and from Orlando to Key West.
Former Alaska Airlines Chairman/CEO Raymond Vecci succeeds Daniel Ratti as president/chief operating officer in December.
World History
