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Aviation History
1986
1986 - 0885.PDF
Ransome abandons Delta ATLANTA Delta is looking for a new commuter partner following Ransome's acquisition by Pan Am. Ransome has been flying as a "Delta Connection" since 1984 feeding Delta's Boston hub. It has a fleet of Dash 7s and Aerospatiale Nord 262s with ATR42s and SF.340s on order. These orders might be cancelled as Pan Am takes control. "They remain to be confirmed," says Joel Dow- shen, Ransome's director of marketing. "It depends on Pan Am". The acquisition's terms have not been revealed. It is scheduled for completion on April 15, with full operation beginning on June 1. Ransome, which ranks 14 in the commuter league table, will become Pan Am Ransome Express, Pan Am's first airline subsidiary. It will feed mainly the major's New York JFK hub. Delta seems to have no hard feelings about having a commuter feeder snitched from under its nose. It did not come as a total surprise, said a spokesman. "We certainly understand the situation they find themselves in and their decision to pursue other directions". The Atlanta-based major is confident it will be relatively i easy to replace Ransome. "We're having discussions with several carriers in the New England area to estab lish whether or not these can provide a legitimate feed for our Boston, New York, and Philadelphia facilities". Bos ton, Delta's fourth largest hub, is the most important of these. "We're not going to rush into something just for the sake of it. It's surprising just how many commuter carriers are interested," says Delta. The commuters Atlantic Southeast, Comair, and Rio also fly under the "Delta Connection" label. Like Ransome they take the major's designation, are in its computer reservation system, As Pan Am Ransome Express, Ransome's Dash 7s will feed Pan Am's JFK hub and can use some of its slots. "The Delta arrangement was going quite well," says Dowshen. "Obviously Pan Am wanted to build a domestic feed into its international system". Ransome's operation "fits perfectly", he adds. The commuter will add further JFK feeds to its network. Pan Am had a feeder agree ment with Empire Airlines, which emerged with Pied mont last October. Empire stops flying Pan Am- designated flights at the end of May, Dowshen points out. With the acquisition, Pan Am Ransome Express conveni ently steps in on June 1, giving Delta a deadline to replace it. A number of commuters operate from Boston. Most of the larger ones like Empire are already committed to a major. Command Airways had talks with Delta before becoming an American Eagle carrier recently. Bar Harbor Airlines is now tied up with Eastern, and only Gull Air with Casa 212s and Cessnas operating into Boston, and a few much smaller airlines, remain unattached. Delta's own fleet is unsuit able for thin feeder routes. It is going through a major re- equipment programme, with 767-300S, 757-200s, and 30 MD-88s on order. LEA offers more shares LUTON London European Airways (LEA), the UK regional carrier which is suing the UK Government over its liberal isation policy, plans to raise up to £600,000 to get itself back into the sky. Publicly-quoted LEA released a prospectus this week for a £600,000 issue for shares in the airline, whose licences were suspended in mid-March. Managing direc tor Nigel Harford says that at least half the shares must be placed in the next four weeks if the airline is to hit its target of re-launching on June 1. About £100,000 has already been pledged, he says. The prospectus forecasts that LEA will break-even in the first 12 months after re-launch and earn a profit in excess of £0 • 5 million after three years. LEA stopped its daily Amsterdam and Brussels service with debts of more than £700,000. The UK Civil Aviation Authority suspended its licences and gave a three- month deadline within which to re-organise its finances. LEA's current market capital isation is £1 • 3 million. AIR TRANSPORT The rescue package is being put together by insolvency specialist Christopher Morris of Touche-Ross, who was liquidator for Laker Airways. Creditors have agreed to have their debt wiped off the balance sheet in return for being paid back in full out of LEA's future profits. Some 25 per cent of all profits over £100,000 will go to the creditors. They could also be benificiaries of several legal actions including a claim by LEA for £300,000 damages from UK Transport Secretary Nicholas Ridley alleging he has abused the Government's liberalisation policy. LEA's Viscount plus a spare engine has now been sold to Caicos International for £380,000 to pay back preferential creditors. The proposed new service will operate with a Shorts 330 or 360 on short-term lease. LEA's plans received a setback last week when the C AA licensed British Midland Airways (BMA) to serve Amsterdam from Heathrow. LEA unsuccessfully objected on the grounds that over capacity on the route would not enable BMA to achieve an adequate return on capital. But the CAA gave it approval as part of its policy to promote competition between the large carriers from Heathrow. LEA now intends to con centrate its business on the Luton-Brussels route while operating Luton-Amsterdam as a four-times-weekly leisure-band service. Meanwhile Harford can reflect on how the UK's liberalisation policy has worked against his airline again. Harford believes that LEA's initial financial plight resulted from it being forced to buy rival carrier Euroflite, to which Ridley had granted a competing licence against CAA advice (Flight, March 1, page 6). # Highland Express has offi cially postponed the launch of its transatlantic services until spring 1987. Chairman Ran dolph Fields said that the de cision was due to market deterioration. Advance book ings to Europe from Canada and the USA are down by 35 per cent, the airline says. Highland's recent equity issue fell £500,000 short of the in tended £2 • 3 million. "I think the smartest thing to do is to sit this one out," says Fields. FLIGHT INTERNATIONAL, 19 April 1986 5
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