Dispute Delays Reno Air’s Bid to Serve O.C.

A deal to allow Reno Air to begin service this week from Orange County’s John Wayne Airport fell apart Monday, leaving air travelers to wait even longer for a second low-cost airline and forcing ticket agents to scramble to re-book passengers.

Reno Air officials said they worked through the weekend in an attempt to iron out a dispute between federal regulators and the airport in order to begin service as planned on Thursday.

Unable to resolve the differences, airport officials asked the Orange County Board of Supervisors to cancel its vote on the Reno Air deal today. Reno Air will now have to wait until at least Oct. 1 before it can fly out of John Wayne, said Reno Air’s lawyer.

“We feel the real harm was to the traveling public of Orange County who will not benefit from our high-quality, on-time service,” said Robert M. Rowen, the airline’s vice president and general counsel.

Low-cost, low-fare Reno Air was being viewed as an important addition to John Wayne Airport, which has had some of the highest airline ticket prices in Southern California because of severe noise restrictions that limit the number of jetliners allowed there.

Reno Air usually matches prices with rival Southwest--the only discount carrier now at John Wayne with flights to Oakland and San Jose--while keeping costs low and offering a few more amenities, such as assigned seats.

Instead of being placed on a waiting list for landing slots as other airlines have been required to do, Reno Air had arranged a deal to begin service immediately through its affiliation with American Airlines.

Under the plan, Reno Air would have taken over six daily flights that American Airlines now flies to San Jose. American, which says it can’t fly the route profitably in competition with Southwest, wanted to turn over the route to Reno Air so that it could maintain passenger loyalty on its other routes. Though separately owned, American and Reno Air have the same frequent flier program and other cooperative marketing arrangements.

The County Board of Supervisors and airport officials initially approved the landing slot trade on a restricted, temporary basis over the objections of some other airlines, including United and Delta. Reno Air announced that service would start June 23.

Before service could start, however, regulators raised concerns about the deal. A final vote was expected today with service beginning Thursday.

The deal, however, came to an abrupt halt last week when the federal Department of Transportation interceded. Regulators would not allow the airport to impose its special restrictions on Reno Air, such as only allowing use of the landing slots through Sept. 30, even if the airline agreed to them, Rowen said. Airport officials refused to let up on the conditions under which Reno Air would be allowed to operate.

“We are surprised the Department of Transportation did not realize the value to the traveling public,” Rowen said. “We are as surprised as anybody.”

Reno Air will now have to wait for airport officials to complete a study of their policy regarding affiliations between airlines, he said. The study is scheduled for completion Oct. 1 at the earliest.

Asked if there is any chance that Reno Air could start service soon, airport spokeswoman Courtney C. Wiercioch said that discussions are ongoing and that “frankly, I don’t know what it would take.”

American Airlines spokesman Al Becker said he was still awaiting official word about the decision on Reno Air, so he did not know whether American’s service between John Wayne and San Jose would continue indefinitely. American has been matching Southwest’s $69 one-way fare on the route and had planned to stop service when Reno Air took over.

Travel agents are being left to sort through the confusion. It had booked and re-booked passengers on Reno Air when the airlines set two earlier dates to begin service.

Thom Nulty, president of Associated Travel Management in Santa Ana, said his agents have been caught in a “yo-yo” between booking passengers on Reno Air and American during the past two weeks as Reno Air’s start date was put off, and now is again being postponed.

Now, he said he will have to send a third memo to Associated’s customers, letting them know of the latest change.

“It’s going to be a loss for Orange County air travelers,” Nulty said. “Given a choice between the thought of going Southwest (without) seat assignments, people would rather go on Reno Air.”

Thomas A. Jackson, president of World Travel in Santa Ana, said his agents preferred booking Reno Air because they can access its flights directly in their computers. Southwest forces agents to telephone for reservations, refusing to pay to join the major computer booking systems.

But Jackson said he understands, given the topsy-turvy world of the airline industry.

“This is just an ongoing thing,” he said, “the vagaries of business.”