Air21
Air 21 Airlines was a successful but short-lived airline based in Fresno, California, founded by David J. Vander Lugt and David Miller. Mr. Morro led the airline as a senior officer and negotiated Air 21’s aircraft lease agreement with US Air to deliver five (5) Fokker F28 64-passenger twin-jet aircraft named “Friendships” by Fokker. The Fokker F-28 was manufactured in Holland and was the oldest airplane manufacturer in the world at the time of its demise.
Contents
● 1 History ● 2 Operations ● 3 Bankruptcy ● 5 Success ● 6 References
History
Although some people believed the name related to ‘21’ or blackjack (due to the airline flying to Las Vegas) the name, created by CEO Morro, was intended to refer to an airline for the 21st century, as indicated by its slogan “Your Low-Cost carrier and Low-Cost Airline for the 21st Century, [1]. The original paper airline was named MVP Airlines, founded by David J. Vander Lugt, President/CEO and David Miller, Vice President/Secretary in January 1994 and incorporated in Las Vegas, Nevada. Miller was an airline captain with several type ratings and extensive experience in operations as a management pilot and executive, as well as a sought after consultant. Mr. Vander Lugt past aviation experience includes serving as a Flight Engineer on military transport jets. Mr. Vander Lugt was working as a real estate agent in Exeter, Ca. and also served as the Treasurer of a small start up paper airline when he met Mr. Miller. [2] [3]
After working with two other aviation consultants to develop the MVP business plan, Miller and Vander Lugt traveled to Washington DC in September of 1994 to meet with Carol Woods (Analyst) at D.O.T. to present the business plan and file the necessary paperwork for the Show Case Order with the intent to seek certification to operate the airline.
In January 1995, the airline leased 50,000 sq. ft. of hanger space at $0.50 per sq. ft. and 6,000 sq. ft. of office space at $0.06 per sq. ft. The administrative offices were WWII Army barracks, next door to the hangar which City of Fresno had recently upgraded. [4] [5]
In March 1995, Miller and Vander Lugt made the decision to take the airline public with an IPO under a brand new California Securities Regulation 25102N after changing the name of the airline to Air 21. Vander Lugt and Miller asked Joe Levy to serve as Chairman of the Board and Mr. Levy hired Mark Moro who was conferred co-founder status.
Miller, Morro and Vander Lugt secured a conference room at the local Holiday Inn at the airport where they locked themselves into the room for 16 hour days to write a prospectus for Air 21. By mid May of 1995, after working with a securities lawyer, a 100 page prospectus for an IPO for Air 21 Airlines was now ready to present to investors to raise the necessary funding to start the airline. By October of 1995 Air 21 had enough investors to satisfy the first phase of funding requirements. On October 28, 1995 the Fresno airport put out the welcome mat for Air 21’s first Fokker F28 passenger jet aircraft delivery. [6] [7]
In late November 1995 D.O.T. awarded a Show Cause Order giving Air 21 the economic authority to proceed with the FAA proving runs and final inspections. On December 18, 1995 the FAA in Fresno issued Air 21’s Air Carrier Certificate. On December 21, 1995 Air 21 flew its first revenue flight to San Francisco. On January 6, 1996 Air 21’s board voted to merge with Jet Engine Supply, establishing Air 21 as a NASDQ company listed as “FLYE”. [8]
Operations
Air 21 had 188 employees operating three (3) F-28s in its first year of operations. The airline was very progressive in many of its practices. It was the second airline in the world to be paperless regarding its maintenance records which were digitized and available to the FAA24/7. [ 10] Vander Lugt and Miller were also instrumental in establishing one of the first ticket-less airline reservation system. The “Low Cost – Low Fare” airlines were set to replace the commuter “propeller” airlines. The local “propeller” airline in Fresno paid its Captains $30,000/year, First Officers $20,000/year, and hard- working Flight Attendants $900/ month. Air 21 paid Captains $48,000, First Officers $30,000/year and Flight Attendants $18,000/year. The airline served “Otis Spunkmeyer” muffins on all flights and the finest spirits and wine. It had fares to Las Vegas as low as $39 and $49 one-way and $119 round trip from Colorado Springs to Fresno at a time when other airlines were charging potentially $467 for the same trip. [9][10][11][12]
Bankruptcy
The first half of 1996 was a good year for Air 21 with the stock prices rising to over $6.00 per share. Air 21 had a commitment from US Air to deliver two more F-28s by April or May and when US Air delayed its delivery schedule by six months, Air 21’s rapid growth was severely impacted. Air 21 had already locked in station leases in several other cities anticipating the other two F-28 aircraft which was designed to put Air 21 over the break even point and would begin to show a steady profit. On May 11, 1996 Value Jet (the model “Low Cost Airline”) crashed in Florida, killing all on board. From this point on the news media were totally focused on shoddy business and operating practices of Value Jet. This turn of events in the airline industry reflected badly on all of the “Low Cost” airline operators and Air 21 could not halt the declining numbers of passengers. Morro borrowed $3M from several local business men in Fresno to keep the airline alive, but soon Air 21 ran out of money. It flew its last flight on December 21, 1996 one year to the day from Air 21’s first revenue flight. In January 1997 the airline entered Chapter 11bankruptcy. An investment banker made an offer to buy Air 21 which was not accepted . The Air 21 Board of Directors accepted Mr. Morrow’s resignation and in March of 1997, Air 21 converted its filing to a Chapter 7 status. [13]
Success
Some people can have success but still fail. Some people can fail but still succeed. Miller and Vander Lugt showed the world another Horatio Alger story, that if someone has an idea, heart and hard work – they can accomplish anything. After all, since 1903 and the Wright Brother’s first flight …. how many people have started an airline? 200, 300, 400? Out of the billions of people who have lived on the planet since 1903, how many people have envisioned a jet airline start-up and were able to gather the finances and resources to actually fly? 100, 200? The same would be true of those mighty mavericks who started railroads, car companies, steel mills, shipping lines etc … It is a success to grab hold of one of these monsters tails and hang on for as long as you can. In 2003 Mr. Vander Lugt was invited to Dubai, UAE to develop a start-up cargo airline for Al Raise Cargo. [See Wikipedia Al Rais Cargo Airlines]
References
1. ^ www.thetravellinsider.info/airlines/airlineslogansa.htm#air21 2. ^ Flyboys: Iron Men – Aluminum Airplanes. pp-34 3. ^ Fresno Bee: Investor Group Plans New Airline, Oct. 22, 1994 archives or davevanderlugt@yahoo.com for additional copies. 4. ^ Airlines of The World – the Maverick Men Who Made Them. pp-78 5. ^ www.en.wikipedia.org/wiki/Fresno_Yosemite_International_Airport 6. ^ Fresno Bee: Welcome mat put out for Air 21, Oct. 28,1995 archives or
davevanderlugt@yahoo.com for additional copies.
7. ^ Airlines of The World – the Maverick Men Who Made Them. pp-83 8. ^ Fresno Bee: Air 21 votes to merge Jan. 6, 1996, archives or
davevanderlugt@yahoo.com for additional copies.
9. ^ Flyboys: Iron Men – Aluminum Airplanes. pp-56 10. ^ Airlines of The World – the Maverick Men Who Made Them. pp-106 11. ^ Fresno Bee: Air 21 prepares for L.A. and Colorado city takeoff Jan. 2, 1996, archives or
davevanderlugt@yahoo.com for additional copies.
12. ^ www.time.com/time/magazine/article/0,9171,135798,,00.html 13. ^ Fresno Bee: The End For Air 21