Imperial Airlines Sells 70% of Stock to Group
Imperial Airlines--most of its fleet grounded, its work force sliced in half and its passenger counts dwindling--on Friday sold a controlling interest in the company to an unidentified group of investors.
Terms of the purchase were not announced, and the identities of the buyers will not be announced until next week, officials said.
The buyers, described by Imperial only as a group of Eastern investors who have formed a firm called United Imperial in Kansas City, bought more than 70% of the commuter airline’s stock from owner Helen Alvarez Smith, former wife of financier C. Arnholt Smith.
Henry R. Voss, formerly the company’s executive vice president, was appointed Imperial’s president, succeeding James Harmon, Helen Smith’s brother, who will be a consultant to Imperial.
Imperial has been in a tailspin since the fall of 1984, when United Airlines removed the company from its “preferential treatment” reservation list. The move was ordered industrywide by the Civil Aeronautics Board, which was concerned that large carriers were using the preference lists as weapons against smaller airlines.
Unfortunately for Imperial, about 85% of its passengers were booked for the purpose of “interlining,” or connecting with major carriers in Los Angeles and Orange County airports.
As a result, passenger counts that totaled 29,000 a month in 1984 dropped to 19,000 in mid-1985 and now total less than 10,000, Voss said.
Only two of the company’s nine airplanes are operating, with four 18-passenger Brazilian Bandierante turbo props and three 36-passenger Shorts Brothers planes sitting idle.
In addition, the airline’s work force of 210 employees a year ago has been cut in half and Imperial now flies to only five of the eight cities it served last year.
The new group plans to restructure the airline and develop a business plan to “get the airplanes back in the air” and boost monthly passenger counts to 35,000, Voss said.
The future of the grounded planes will depend on how the company expands, Voss said. If the idle aircraft are not used, they will either be sold or leased.
Harmon was asked to remain as Imperial’s president but he wanted to spend more time at San Diego television Channel 69, where he is part owner, Voss said.
Part of Smith’s purchase agreement with Harmon and his two partners was that she would have to finish paying the purchase price by a certain date, otherwise part ownership would revert to the sellers.
It is uncertain whether that proviso took effect with Friday’s purchase. Harmon could not be reached for comment.
This is the second time in his career that Voss has succeeded Harmon to the presidency of an airline. When Harmon left as part owner of Golden West Airlines to join Imperial in 1979, Voss became president of Golden West.
