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Aviation History
1988
1988 - 0008.PDF
AIR TRANSPORT Highland looks for rescue PRESTWICK Highland Express went into liquidation only five months after it started revenue service from Prestwick, Scotland, to the USA and Canada. A package which will resurrect the airline and pay some of the creditors was being assembled by Randolph Fields, the airline's former chief executive. The airline was originally incorporated in July 1984. After a number of false starts, including a decision by the UK Civil Aviation Authority that the airline was undercapitalised, the airline launched its first commercial flight on June 30, 1987 (Flight, July 18, 1987, page 4). At the Highland Express creditors' meeting the liqui dators, Touche Ross, outlined five aspects which led to the collapse of the airline with debts of about £8-4 million, including the trading loss of £6 million accrued between March 31, 1987, and Decem ber 11, 1987: • Commercial operations were delayed by the with drawal of GATX from an agreement to supply a Boeing 747 on lease. • A 747 leased by Citicorp was delivered late because of technical problems resulting from the fact that the aircraft was in a worse condition than expected. The directors may try and take action against Citicorp. • The loss of credibility in the market. • The loss of revenues owing to the delay in revenue flights starting service. • The subsequent loss in projected cash flow from advance ticket sales. The liquidators are now trying to secure the best inter est of the creditors. Collecting the money on 4,000 advance bookings is one such task. It has also been considering the idea put forward by Randolph Fields, of resurrecting the airline through another com pany. Touche Ross partner Robin Wilson suggests that Highland Express needs a rescue package to get it airborne again the consortium should "over the next few weeks try and raise extra capital and not consider flying again until the spring". Fields blames the airline's liquidation on the failure of promised funding to material ise to see the airline through the winter months. It has been suggested that the world's stockmarket crash on "Black Monday" has led to a liquidity problem through out the world, and that High land has been one of the victims. Highland's sole 747 has been at Sabena's maintenance plant since the liquidation. It was there on a routine check, but Sabena has not released the aircraft because of the money it is owed. Fields tells Flight that it would have cost about £1 • 3 million to get the aircraft in service again after its check at Sabena. The airline was solvent at the end of November, and on direct operating costs was making money from Septem ber 1, 1987. The Christmas bookings were also set, with a 70 per cent load factor at the time of liquidation, Fields said. Since October load factors had been about 70 per cent, according to Fields, but the airline could no longer settle its debts, and thus had to cease trading. Highland said it needed a 60 per cent load factor over one year to break even. Fields claims that the airline's projections were on target from October. The delayed start had badly hit its early projections. About £2-5 million was the esti mated loss planned for the winter period, he said. Fields was confident that his consortium would be able to raise £5 million to resurrect the airline in 1988. He would, however, play a subordinate role in the operations. High land has been looking for a managing director from the aviation industry to run the new airline. It was planned to return with charter operations in January and scheduled services in March, ready for the Easter holiday traffic. Fields said that the rescue would need the support of a number of parties including the CAA, creditors, its customers, and employees. Citicorp told Highland that it was willing to help in its resurrection, and indicated to Fields that it is willing to give a grace period on the lease during the winter. Patcos may be rehired WASHINGTON D.C. US politician Guy Molinari has introduced a new Bill to require the Federal Aviation Administration to rehire at least some of the air traffic controllers it fired in 1981. Representative Molinari's new Bill would bring back 500 of the "best qualified" former controllers in each of the next two years. Controllers who engaged in criminal activity or took actions that resulted in personal injury or property damage would not be rehired. The controllers would have to complete a probationary work period. The Bill would also protect present controllers from any adverse employment effects of the addition of reinstated controllers. The potential legislation has been approved by the House Post Office and Civil Service Committee. A similar Bill was passed two years ago by both houses, but it was vetoed by President Reagan. SIA hunts new pilots SINGAPORE ~ Singapore Airlines is head hunting at least 170 pilots in anticipation of fleet expan sion and more services. The carrier has bought two Airbus A310-300S which are due this month, and a Boeing 747-200 freighter is duo for delivery next year. It has also ordered 20 747-400S. The carrier needs 66 captains, 52 first officers, and 20 second officers, primarily for the 747, 310, and 757 fleet, the company says. These are in addition to 36 cadets recruited each year by SIA. Response to the current recruitment drive is said to be better than in previous years, but "one problem we face, along with all other airlines, is that there is a shortage of pilots internationally," SIA says. In addition to its new aircraft, SIA is expanding services. It added Istanbul, Kathmandu, and Port Moresby this year, and plans to operate to Darwin and Fukuoka next year. The longer-haul routes will require dual crews, adding to the strain on the current roster of 584 pilots. FLIGHT INTERNATIONAL, 2/9 January 1988
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