Prime Time Shuttle International Inc., Southern California's second-largest airport-shuttle service that has suffered under the weight of the economic recession and last year's slump in travel during the Persian Gulf War, has filed for Chapter 11 bankruptcy court protection.
The company filed the petition in federal bankruptcy court in Los Angeles earlier this month. The court documents list $256,816 in total assets and total liabilities of $2.05 million, including $50,623 in secured debt.
John E. Kindt Jr., Prime Time's president, said the economic downturn and sagging air-travel market came at a particularly bad time for the company because they coincided with Prime Time's November, 1990, merger with rival City Shuttle. After the merger, the combined companies--both formerly based in Van Nuys--moved to new headquarters in Sun Valley and invested in a new computer system for tracking rides.
The computer system is now completed and will help to increase efficiency and reduce overhead, Kindt said. But the cost of putting the system in place at a time when business was declining was an additional drag on profits, he said.
Kindt said Prime Time suffered "significant losses" last year, but declined to elaborate. He contended that the company is now operating profitably, but said the bankruptcy filing was necessary because "we needed some breathing time" from creditors.
In a Chapter 11 bankruptcy, a company is shielded from its creditors and continues operating while it forms a plan to reorganize and pay its debts.
Bankruptcy documents state that Prime Time's revenue totaled $6.89 million in the year ended Sept. 30, 1991.
In the previous year--prior to the merger with City Shuttle--Prime Time had $4.56 million in revenue. From Oct. 1, 1992, until March 4--the date of the bankruptcy filing--revenue totaled $1.8 million.
Kindt said Prime Time has begun cutting costs by eliminating about 50 administrative jobs. The company's work force typically fluctuates from 350 during the slow winter months to 550 during the peak summer travel season, he said.
Kindt owns 70% of Prime Time. City Shuttle founder Rod Ramsey, who is now Prime Time's chief financial officer, owns 30% of Prime Time.
The airport-shuttle business was born of a 1981 state Public Utilities Commission decision that deregulated a market then dominated by cabs and buses. Shuttle companies use vans to drive several passengers at a time to and from airports and charge as little as half the price of a taxi ride.
Prime Time, founded by Kindt in 1986, ferries passengers to and from LAX and Burbank, Long Beach and John Wayne airports in its 91 red vans. It is a distant second in size to the region's largest airport-shuttle service, Los Angeles-based SuperShuttle.
In addition to recession-related problems, Kindt said that in recent years big shuttle companies such as Prime Time and SuperShuttle have been hurt by the growth of smaller shuttle operators. Most of those smaller firms have far lower overhead because they don't maintain routing, dispatching and reservation services for taking passengers to the airport.
But the smaller operators vie for curb space in front of airport terminals in the hope of picking up returning passengers. Prime Time says it needs those round-trip fares to make a profit, and has been pushing for stiffer airport regulations controlling shuttle operators.