ValuJet Returns to Tougher Skies
ValuJet Inc. resumed service Monday with a flight marked by pomp, the requisite on-board trivia question and a jazz band playing “Happy Days Are Here Again.”
It may be awhile before happy days truly are back at the Atlanta-based discount airline, which faces increased competition and continued scrutiny from federal regulators in the wake of a fatal May crash and subsequent shutdown.
Amid the balloons and the blaring music, there’s little question who ValuJet’s biggest nemesis is: Delta Air Lines Inc., whose jets sandwiched ValuJet Flight 6 Monday afternoon on the runway at Hartsfield Atlanta International Airport.
Delta today launches its own discount airline, Delta Express, which is matching ValuJet’s initial fares of $19 for trips to Florida.
“They cannot make money at $19,” ValuJet President Lewis Jordan said. Of course, neither can ValuJet, which is raising its fares Thursday.
Separately Monday, discount carrier Kiwi International Air Lines, which has been battered by problems since its start four years ago, filed for Chapter 11 bankruptcy protection and cut its service to three cities from eight.
The Newark, N.J.-based carrier said past debts, its partial shutdown this summer and the effect of the ValuJet crash hurt its business.
“This filing is the most fair, sensible and prudent measure for vendors, employees, investors and the traveling public,” said Jerry Murphy, president and chief executive.
“Through these events, which also include ValuJet’s grounding and a traditionally slow September, Kiwi has slowly bled to the point where we have to take action,” he said.
Kiwi will reduce its staff, but spokesman Rob Kulat declined to specify how many jobs will be cut.
Starting today, Kiwi will fly only between Newark, Chicago and Atlanta, with full refunds offered to travelers booked on flights to Bermuda, Las Vegas, Orlando, Tampa and West Palm Beach, Fla., Kulat said.
The FAA grounded four of Kiwi’s jets in June because of questions about pilot training and record keeping. The airline received permission Aug. 20 to fly all its aircraft.
For ValuJet, which spent the last three months awaiting approval to fly, the outlook is brighter.
The discount carrier sold 30,000 seats through noon Sunday, 1,400 in the first three hours that ValuJet was taking reservations. The total is twice as high as the record sold earlier this year when the airline operated 300 daily departures. The airline has restricted service to Atlanta, Washington and three Florida cities: Fort Lauderdale, Orlando and Tampa.
And more good news is expected to come this week when ValuJet is expected to announce an agreement to sell eight of its planes, four MD-80s and four DC-9-21s, according to Chairman Robert Priddy.
That would help the airline replenish its cash reserves, which stood at $254 million before the crash but are estimated at less than $175 million now.
Shares of ValuJet rose 6 cents to close at $12.06 on the New York Stock Exchange.
Before Flight 6 took off, ValuJet entertained the 115 passengers and employees with the red-coated Bourbon Street Jazz Band and served coffee and doughnuts. The festive atmosphere in Concourse C was a stark contrast to the silence that followed the airline’s shutdown.
The carrier was grounded in June because of Federal Aviation Administration doubts about its maintenance programs. The airline had come under scrutiny after a series of incidents, including a fire that destroyed a jet and two cases in which planes rolled off runways.
While the review was underway, a ValuJet plane crashed into the swamp near Miami on May 11, killing all 110 people aboard.
The crash is thought to have been caused by a fire that originated in a cargo hold containing chemical oxygen generators. ValuJet was not authorized to carry the generators and blamed a subcontractor for mislabeling them. The National Transportation Safety Board is still investigating the crash and has not made a final determination of the cause.
