Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 23, 1993 TAG: 9305210054
SECTION: BUSINESS PAGE: F-4 EDITION: METRO
SOURCE: BERNIE KOHN KNIGHT-RIDDER/TRIBUNE
DATELINE: LENGTH: Medium
Tentative plans call for Southeast Express Airlines initially to serve five cities, including Greensboro, with DC-9 or MD-80 jet aircraft. DC-9s typically have around 100 seats, while MD-80s have around 140. Among the other cities being considered for initial service are Chicago, Boston, Miami, Tampa and St. Louis.
Southeast Express's organizers are looking to appeal to Triad residents who usually must fly through one of the major airlines' major hubs, such as USAir's in Charlotte.
They envision low-fare, point-to-point service in the mold of Southwest Airlines, the only profitable major airline the past three years.
"The traveling public is weary of hubs. I know I am," Robert Bushman, a principal Southeast Express organizer, said. "If I want to go to Denver, I want to go to Denver - not Charlotte, Dallas or Atlanta. . . . There is a place for airlines that fly direct services, that do it cheaply and that put out a fare structure that makes sense."
Bushman projected initial employment of about 130. The airline recently advertised for pilots with DC-9 or MD-80 experience. Southeast Express plans to hire line mechanics but expects to contract out heavy maintenance, such as overhauls, Bushman said.
Southeast Express filed incorporation papers with the State of North Carolina only two weeks ago. It has yet to apply to the U.S. Department of Transportation and Federal Aviation Administration to obtain a flight certificate.
Also, Bushman said, his grouphas "a ways to go" to secure financing.
Some of the startup money, but know I am. If I want to go to Denver, I want to go to Denver - not Charlotte, no more than 10 percent, will come from employees, who will be required to invest in the airline. That requirement is in place to instill loyalty, more than to raise capital,Bushman said. The minimum investment will be "nowhere near" the $50,000 required of pilots at one startup carrier, Kiwi International Airlines, he said.
Southeast Express is the latest among several dozen fledgling firms looking to take flight in the biggest frenzy of startup activity seen in the airline industry since the early days of deregulation.
Undaunted by the enormous losses incurred by major carriers, the startups have been encouraged by a glut of used airplanes available for lease, signals from the Clinton administration that it will protect new carriers from being unfairly squashed by the majors and a perception that many markets are underserved or poorly served.
Bushman is a former chief executive officer of Orion Air, a cargo carrier that was based in Raleigh, N.C., until going out of business 3 1/2 years ago. Along with several former Orion colleagues, he has operated a transportation consulting firm in Raleigh since leaving Orion in late 1989.
Orion operated flights for major cargo services but lost most of its business when United Parcel Service in 1988 decided to form its own cargo airline. That same year, Orion gained unwanted national attention by agreeing to fly planes for the now-defunct Eastern Airlines if Eastern's unionized pilots honored a mechanics' strike.
Eastern canceled the contract after it was spotlighted in congressional hearings and blocked in court. And at about that same time, Orion was fined $636,000 by the FAA for maintenance violations. The company and the FAA eventually reached a settlement for a much lower figure, according to Bushman.
Bushman said he doesn't expect that history to be used against Southeast Express as it seeks a flight certificate, even though Eastern's history has become a factor in the application of another startup, Friendship Airlines. A majority of Friendship's stock is owned by Frank Lorenzo, former chairman of Eastern and Continental.
by CNB