ValuJet to Stop Flying Till It Fixes Deficiencies

ValuJet Airlines agreed to suspend all flights immediately until it corrects “several serious deficiencies” found during an intensive inspection by the Federal Aviation Administration, the government agency announced Monday.

The budget airline halted operations Monday night, sending passengers scurrying to make other arrangements and casting doubt on the ability of the airline to survive.

FAA Administrator David Hinson said the airline, which operates some of the oldest jets in commercial service, had failed to establish the airworthiness of its aircraft. The planes are an average of 25 years old.

Hinson said the inspection found systemwide maintenance deficiencies, “multiple shortcomings” in controlling the quality of contractors performing work for the airline, and a “lack of engineering capability in the maintenance support organization.”

ValuJet called the action “grossly unfair” because it was unable to respond to the FAA concerns.

“ValuJet has already begun its return-to-service plan,” ValuJet President Lewis Jordan said in a statement. “But at this moment we cannot tell you exactly when we will resume service, or with how many flights.”

The FAA’s conclusions came at the end of a 120-day review the government agency began in February and intensified after a ValuJet DC-9 crashed into the Everglades May 11, killing all 110 people aboard.

Jordan said ValuJet will provide full refunds for customers with bookings for flights today and beyond. ValuJet said it would provide more information today about the status of airline employees and about the steps it is taking to resume operations.

Employees, who faced not only frazzled customers but their own uncertain futures as well were shaken. “It makes you want to cry,” ticket agent Patricia Sinyard said in Atlanta. “The FAA and the news media have destroyed this airline.”

The shutdown was to continue until the airline demonstrates “appropriate corrective action,” Hinson said. “We asked them to cease operations based on the inspection and they agreed to do so.”

Such a halt is a rare, drastic step in the airline industry. It throws a huge obstacle in the way of a struggling company seeking to recover not only from the crash, but from a wave of damaging publicity that resulted as investigators looked into its operations and found a growing number of questionable safety incidents.

ValuJet’s suspension of service is certain to spread public concern about the safety of other start-up carriers. “It’s the low-fare, no-frills carriers who are not established that will feel the heat,” said travel industry research Peter Ostrowski.

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The ValuJet crash had already made many customers “worry about new airlines that they have not heard about,” said Santa Ana travel agency executive Thomas Nulty. The FAA’s most recent action will raise doubts about the government’s regulation of industrywide safety practices, he said.

“I think this will give a lot people second thoughts about the process the FAA goes through in reviewing airlines,” said Nulty.

Although ValuJet operates primarily along the East Coast, one of Southern California’s largest employers, Long Beach-based Douglas Aircraft, has a major interest in the airline’s long-term survival. Last fall, ValuJet was the first airline to place an order for Douglas’ new MD-95 jetliner. The $1-billion order for 50 of the 120-seat jets allowed the struggling subsidiary of McDonnell Douglas Corp. to launch production of the aircraft.

Douglas Aircraft spokesman Don Hanson would not comment on how ValuJet’s suspension might affect its MD-95 order, saying only that “we expect to deliver the first jet in 1999 as scheduled.”

The FAA’s decision comes after the aviation agency had given ValuJet a vote of confidence in the immediate aftermath of the crash.

“The airline was deemed to be safe,” Hinson said. “That decision was based on evidence at the time.”

In a written agreement reached with the Atlanta-based airline, the FAA spelled out steps the company must take to comply with federal flight safety regulations. The agency did not release the agreement publicly.

Hinson said at a news conference that the intensified inspections during the past four weeks equaled four years of examinations. After checking 2,000 elements of the airline’s operation, the FAA determined that “ValuJet has not demonstrated that it has an effective maintenance control system,” he said.

Investigators have yet to make an official determination of the cause of the crash of Flight 592 on May 11. The initial reading of the DC-9’s cockpit voice recorder, however, seemed to support physical evidence that the jetliner was disabled by a fire that probably started in the plane’s forward cargo hold.

A focus of the investigation has been 119 oxygen generators packed into the hold. Some of them may have contained a volatile mix of chemicals that could have either fueled or sparked a fire. None of the generators was equipped with safety caps designed to prevent them from igniting when jostled. The airline was not authorized to carry the canisters.

The severity of the FAA move stunned some observers of the aviation industry.

“Wow,” said Phillip J. Kolczynski, an aviation attorney in Irvine. “I don’t see how you can temporarily shut down and then hope to say to the public they should have confidence. I’d think that’s very bad news for ValuJet.”

Because FAA inspectors have a variety of enforcement tools short of shutting down an airline, the halt of operations is “rare, unique and drastic,” he said. “It sounds devastating to me.”

The airline began operations in October 1993 with a limited fleet of jets purchased from other carriers.

It expanded quickly, eventually serving more than 24 cities in 17 states and competing with major, established airlines on lucrative, well-traveled routes by undercutting others’ fares while aggressively holding down operating costs of its more than 50 airplanes. It had a net income of $67.8 million in 1995 on revenues of $368 million.

Passengers and others waiting for ValuJet flights at Hartsfield International Airport in Atlanta were generally unhappy at the news of the shutdown.

“I’m upset,” said Wendell Cooper of Raleigh, N.C., who was hoping to catch one of the last ValuJet flights out of Atlanta. “I don’t fly a lot, but I’m flying ValuJet because it’s cheaper.”

Judy Suesting of Marietta, Ga., who had come to the airport to meet her sister’s incoming flight, said she “never had any problems [with ValuJet]. I had real good service. . . . We think that somebody is trying to put ValuJet out of business. Other airlines have had crashes, ValuJet is no worse. If they’re going to shut down ValuJet, they should shut them all down.”

Greg Rodgers of College Park, Ga., who had flown into Atlanta Monday from Indianapolis, blamed the news media for “exaggerating” the potential safety problems and said he never felt any concern about safety. “I’m upset because now the prices are going to go up,” he said. “I was never upset about the service that was given to me.”

Times staff writers Eric Harrison in Atlanta and Jesus Sanchez in Los Angeles and the Associated Press contributed to this story.