KIWI APPEALING FAA'S REFUSAL TO ALLOW FLIGHTS PAN AM DEAL PLACED IN DOUBT
LOUIS LAVELLE, Staff Writer
Federal aviation officials met with representatives of Kiwi International Air Lines on Thursday, but they refused to give the grounded Newark-based carrier permission to fly until it can satisfy the agency's safety concerns.
With the FAA showing no sign of budging, a proposal by Kiwi's would-be savior, Pan American Airways, to pump $ 3 million into the ailing airline was increasingly in doubt.
An FAA spokesman said agency officials met for two hours at Kennedy International Airport with Kiwi and Pan Am representatives, who appealed to the FAA to lift the order revoking Kiwi's operating certificate.
Kiwi's fate is now in the hands of the National Transportation Safety Board. Kiwi filed an appeal of the FAA revocation order late Wednesday night with the NTSB.
"They requested that we lift the revocation, but we didn't,"said FAA spokesman Jim Peters."The revocation order remains in effect pending the outcome of Kiwi's appeal to NTSB."
Kiwi spokesman Rob Kulat said the carrier was disappointed that the FAA refused to reconsider its action, saying the Pan Am deal would have provided the money and management personnel needed to satisfy the agency's safety concerns. He said Kiwi is requesting an expedited hearing before an administrative law judge on its NTSB appeal.
"They're standing firm on their decision," Kulat said,"much to the distress of 500 employees and thousands of passengers."
When the FAA revoked Kiwi's operating certificate on Wednesday, it said the airline had repeatedly flown unsafe planes and was "unable or unwilling to provide service with the highest possible degree of safety."The move forced Kiwi to suspend its six-city schedule, grounding the airline for the third time since 1994.
On Tuesday, the U.S. Department of Transportation vowed to put Kiwi out of business, citing financial and management problems. Hours later, Kiwi filed for Chapter 11 bankruptcy protection as part of a deal that would allow Pan Am to acquire the carrier.
As part of the deal, Pan Am agreed to fund a $ 3 million bailout of Kiwi , which would have allowed Kiwi to keep flying. But with the FAA unwilling to give Kiwi the all-clear until it resolves the safety issues, and with the DOT vowing to go ahead with its plan to revoke Kiwi's operating certificate, the Pan Am deal seemed anything but certain.
A spokesman for Pan Am could not be reached for comment, but Kulat said the deal is far from over.
"Pan Am has indicated they're sticking with us,"he said."But they have to assess the situation with the FAA and our appeal before the administrative law judge."
The FAA's decision to ground Kiwi left hundreds of passengers in Newark and elsewhere stranded, with no other carriers willing to honor Kiwi tickets.
But Kulat said Thursday that two other airlines had agreed to fly Kiwi passengers on a standby basis through April 1. Continental Airlines will honor those tickets as if they were its own, and American Trans Air, which has service to Kiwi destinations in New York, Florida, and Puerto Rico, will give ticketholders a $ 100 credit, regardless of the price of the original ticket.
The Port Authority of New York and New Jersey, which operates Newark International Airport, said it will provide free transportation for Kiwi ticketholders to Kennedy and La Guardia airports, or free local return trips home. A multilingual staff at Kiwi ticket counters will provide information on travel alternatives, and free phones are available for Kiwi ticket holders to make other travel arrangements.
Kiwi , which was founded by former employees of Eastern and Pan Am, took to the air in 1992 and grew to have 1,200 employees and a fleet of 15 leased planes at its peak. Since then it has been grounded twice. In 1994, the FAA grounded Kiwi for five days over concerns about pilot training, and in 1996, the carrier suspended flights for three months after running out of cash following its first bankruptcy filing.
Under the terms of the latest bankruptcy filing, Charles Edwards, the Baltimore surgeon who rescued Kiwi from bankruptcy in 1996 and who has since borrowed $ 21 million to keep it afloat, was replaced as president and CEO by a Kiwi consultant, Gene Gillespie. Edwards will remain as chairman.
Today, Kiwi has 550 employees and a fleet of five rented planes.
Three were secured at airports in Miami and Puerto Rico late Wednesday and two are out of service.
Two other planes were returned to their owners last month, but that's the least of Kiwi's problems. The carrier owes hundreds of thousands of dollars to various airports and has been threatened with eviction from Newark. Passenger complaints are up, employees are leaving, and service has been canceled in Atlanta, Boston, Chicago, and Flint, Mich. Kiwi now flies to Newark, the Florida cities of Orlando, Miami, and Palm Beach, and to San Juan and Aguadilla, Puerto Rico.
Kiwi's troubles have caught the attention of a rival low-fare airline, Spirit Airlines of Detroit, which is hoping to move in and fill the void it expects Kiwi to leave at Newark. Spirit now runs five flights a day out of Newark, renting gates from other airlines that own the rights to them.
"We're anxious to see if we can obtain a gate and some additional ticket counters at Newark,"John Ruzich, Spirit's senior vice president for marketing, said Thursday."We're here and we very much want to grow our operation in Newark."
Founded in 1980 as a tour operator, Spirit has become the largest airline serving Atlantic City, and it also has flights to several major Florida cities and Myrtle Beach, S.C. The privately owned company runs about 70 flights a day.
Ruzich said the company faces none of Kiwi's financial woes, but it does suffer when a rival low-fare airline attracts negative publicity, as happened four years ago when a ValuJet plane crashed in the Florida Everglades.
"We've had only two losing quarters, and one was the ValuJet year," Ruzich said."We hate to see a carrier like ourselves go out of business, because we get painted with the same brush even though we have an exemplary safety record. That's bad for our company and others like us. It is a fight."
He said he has met with the Port Authority of New York and New Jersey, but is finding little room available for Spirit planes because the major airlines control all the gates.
"With Kiwi gone, we will be the only low-fare airline serving Newark," Ruzich said. >Staff Writer Doug Most contributed to this article. |
