Sugarman Firm Will Acquire Aspen Airways
Los Angeles financier Burt Sugarman agreed Monday to buy Aspen Airways, a 35-year-old airline serving Colorado’s ski resorts.
The price was not disclosed, but industry analysts estimated that the airline, which operates under the name United Express, was worth about $50 million.
“It’s a unique franchise, a very interesting airline,” Sugarman said in a telephone interview Monday. “As a part-time resident of Aspen for 22 years, I’ve flown on it many times over the years, and I’ve enjoyed the service.”
The airline had been for sale for several months. Donald W. Ringsby, chairman of the family-owned carrier, said his family decided to sell because it could not afford to replace Aspen’s older aircraft. Ringsby said it could cost between $8 million and $10 million to replace Aspen’s 10 Convair 580 commuter planes. The turbo-props are about 25 years old.
“Those are big numbers,” Ringsby said. “It’s a little out of our ability to handle it.”
Aspen also operates four British Aerospace-146 jet aircraft.
No Immediate Plans
Ringsby and Sugarman declined to say whether the airline is profitable. Steven Horner, an analyst with Avmark Inc., an airline consulting firm in Washington, said Aspen probably either broke even or lost money. “My feeling is it sort of struggled along.”
Horner said Aspen was hurt recently by a competitive onslaught from better-financed Rocky Mountain Airways, a unit of Continental Airlines. Aspen serves 16 cities in the western United States and Canada, although some flights are scheduled only during skiing season.
Sugarman, a former television and film producer, is acquiring Aspen through Giant Group Ltd., a Beverly Hills holding company that he controls. It also owns cement plants and a fast-food restaurant chain. Sugarman said he started exploring the purchase of Aspen a few weeks ago.
Sugarman said he had no immediate plans for the airline. “We just completed the deal over the weekend,” he said. “When I go down there and talk to everyone from the airline, I’ll probably know a lot more.”
Aspen’s marketing partner, United Airlines, turned down a chance to buy the airline, Ringsby said. However, United recently reached a tentative contract agreement with its pilots that would allow it to invest in its marketing partners, such as Aspen Airways, Horner said.
“Sugarman might be speculating that the contract will be approved, and (that) United might buy the airline from him or invest in it,” said Horner.
