America West Is Late With Rent at Wayne Airport
America West Airlines was late Tuesday on its first rent payment to John Wayne Airport since filing for bankruptcy in June. But the Phoenix-based airline said the check was in the mail.
America West pays $297,768 a month in rent to the airport due the first of the month. With a 15-day grace period, July’s rent was due Monday at the latest.
Another $135,000 is due no later than Saturday for June’s landing fees.
America West said it is deciding which operating costs to continue paying but plans to continue renting space at John Wayne.
The airline operates 26 flights a day from the airport, the most of the seven airlines there.
America West said Tuesday that the airports in Las Vegas and Phoenix will let the airline defer its rent payments. Both airports are hubs for America West, and replacing its many flights might be difficult.
But the airline has a lot less leverage at John Wayne, where the manager was talking tough Tuesday. America West would either pay up or be evicted, said Jan Mittermeier, the airport manager.
Because of noise restrictions, there are fewer than 100 flights a day at John Wayne, creating lots of competition among the airlines for those slots. So America West could probably be replaced here more easily than at Phoenix or Las Vegas.
“I’m sure other airlines would want their slots,” Mittermeier said.
While America West won’t talk specifics, airport officials said the airline’s Orange County operation is profitable. The airline runs the county’s only daily nonstop flight to the East Coast, a flight to John F. Kennedy International Airport in New York.
The recession and the high cost of fuel have clipped America West’s wings. The company lost $75 million on revenue of $1.3 billion last year. In the first quarter this year the airline lost $50 million on revenue of $353 million.
In June, the company said it would defer lease payments on its jets, skip an interest payment on its junk bonds and ask the states of Arizona and Nevada for financial aid. None of that was enough to keep the carrier out of the bankruptcy courts. The airline filed in late June and is now reorganizing under protection of the court.
Without huge interest payments to make, the airline is now “cash-flow positive,” said Martin Whalen, the airline’s senior vice president and general counsel.
That’s good news for most of the people the airline does business with, like John Wayne Airport. But the airport would get its money anyway. Under its agreement with the other airlines, it could simply add what America West might owe to the other carriers’ bills.
