EASTWAY AVIATION: Long Island MacArthur Airport, Ronkonkoma, New York 11779, United States; Phone (516) 7379911; Fax (516) 737-4926; Year Founded 1979. This corporate carrier is established in 1979 to provide nonscheduled services for company executives in the New York and New England area. By 2000, the concern employs nine pilots and operates two Beech Super King Air 200s and a King Air 90.
EASTWIND AIRLINES (THE BEE LINE): United States (19941999). Low-fare Eastwind is conceived by former Price Waterhouse analyst Jim McNally and former Eastern Air Lines executive Richard R. Haller at Trenton-Mercer Airport in New Jersey in the summer of 1994. Eastwind Capital Partners provides initial capitalization and the DOT certification process is begun; it will take McNally and Haller two-and-a-half years from idea to first flight. Meanwhile, the new entrant chooses for itself the nickname “The Bee Line,” which is based on its slogan “Make a beeline for lower fares and fewer hassles.”
Purchased by UM Holdings, Ltd. of Haddonfield, New Jersey, in January 1995 before it can start-up, John Agliaforo becomes chairman, with Jim McNally as president, Gerry Albans as CEO, and Richard Haller as vice president-management. Plans are made in February for the lease of two Boeing 737-2H5s, formerly operated by USAir, from Shawmut Bank and the inauguration of revenue services to Boston and Greensboro. Government certificates are received in just 85 days from application.
A workforce of 80 is recruited and, following delivery of the first “Baby Boeing,” twice-daily roundtrips commence on August 16 to Boston and daily roundtrips to Greensboro, North Carolina. The oneway fare from New Jersey to Massachusetts is $53 and from New Jersey to North Carolina, $63. Through service is available from Boston to Greensboro via Trenton for a deep-discount, one-way fare of $83.
The second B-737-2H5 is delivered on August 30. Like the first, it has a white fuselage decorated by a yellow wind-blown scarf; the solid green tail displays a large smiling bee above the title “The Bee Line.”
On October 18, winter holiday flights are started to and between Jacksonville and West Palm Beach in Florida. Indeed, Eastwind is the only airline providing scheduled jet service from Jacksonville to West Palm Beach. Simultaneously, the company introduces special fares, good through November 15. Travelers booking roundtrips from Florida to Trenton or Greensboro are permitted to take someone else along for a dollar.
Atotal of 44,000 passengers are flown by year’s end. Costs associated with start-up exceed operating income and there are losses: $2.7 million (operating) and $2.71 million (net).
There is no change in the employee population or fleet during 1996.
On March 9, executives announce that the carrier will substitute new routes to Providence and Richmond on April 16 for its Florida flights.
The change will give the new entrant four daily flights on the East Coast.
Although bookings slip almost 50% in the week following the May 11 Valujet Airlines disaster in Florida, they quickly rebound; on May 22, service is inaugurated to Atlanta, Valujet’s home base and site of the summer Olympic Games.
On June 6, two more daily roundtrips are inaugurated from Trenton to the Georgia metropolis, one via Greensboro and the other via Richmond.
For the fourth time in a month, one of the company’s aircraft on June 9 suffers a yaw anomaly. While descending to Richmond, a B-737-2H5 with 53 passengers rolls sharply to the right. Capt. Brian D. Bishop is able to oppose the roll, which brings an NTSB investigation and the grounding of the aircraft for two months. In its place, a B-737 is wet-leased from Viscount Air Service.
A maintenance contract is entered into with USAirways; each night, the company’s planes are flown to the major’s Greensboro maintenance base for preventive and scheduled upkeep.
Promotional fares, known as Bee Line Specials, commence on July 20. Good through August 24, the first promotion is for a $25 one-way tariff between Atlanta and Trenton. Four-times-a-week roundtrips between Trenton and Orlando commence on August 29.
Passenger boardings soar to 169,647 and revenues reach $13.02 million. Expenses, however, skyrocket to $18 million and leave an operating loss of $4.98 million; a net $5.05-million loss is also reported.
President McNally departs in March 1997 to “pursue other endeavors,” and is succeeded by Capt. Herman F. Gillis 3rd.
Company headquarters are transferred from Trenton to Greensboro, North Carolina, and orders are placed for two Next Generation B-737-700s for delivery in April and June of 1998. Meanwhile, the route network is revised. Unprofitable markets at Richmond, Atlanta, Jacksonville, and West Palm Beach are dropped and frequencies from Greensboro to Tampa, Orlando, Trenton, and Boston are increased.
The company’s marketing direction is changed to rely more heavily on travel agents. On May 19, Eastwind switches to the Wings 2000 computerized reservations system software developed by Florida-based SSI and establishes a reservations center in Orlando. The previously reservations contract with Dakotah Reservation Services of Aurora, Colorado, will be terminated when the new system is turned on.
New emphasis is placed on on-time performance; in July, all departures are made 100% on time.
The new reservations center in Florida opens on November 19. The new connections to Apollo, SABRE, SystemOne, and Worldspan bring an immediate boost in agency business.
On December 1, the carrier launches twice-daily frequencies from Trenton to Washington, D. C. (lAD), with continuing service to Greensboro. A third B-737-2H5 is leased in December.
Customer bookings climb 14.1% to 194,000. Operating revenues jump 37.2% to $17.87 million, while expenses rise 35.2% to $24.34 million. The operating loss deepens to $6.47 million, while a net $6.55-million loss is suffered.
Early in January 1998, service is discontinued between Trenton and Boston.
Upon the arrival of the Boeing, new daily nonstop service is inaugurated on January 22 from Greensboro to Fort Lauderdale, together with one-stop flights from Trenton and connections from Washington, D. C. (IAD). The same day, the company begins to operate four daily roundtrips between Greensboro and Trenton and twice-dailies to Orlando from both Trenton and Greensboro.
As the result of a large number of petitions, the carrier, on April 6, reinstates its twice-daily roundtrips between Trenton and Boston.
The company’s first Next Generation B-737-700 is received in July.
Rochester becomes a company hub on August 1. From that New York community, Eastwind offers twice-daily nonstops to Boston and Washington, D. C. (lAD) and twice-daily direct flights to Trenton and Greensboro.
The company’s second Next Generation B-737-700 is received at the end of the first week in August. It is employed to increase frequencies from
Rochester to Boston and Washington on September 9 from two daily nonstops to three, with three direct services to Trenton and Greensboro.
Daily B-737-700 roundtrips are inaugurated on November 23 between Greensboro and New York (LGA).
Customer bookings accelerate 15% to 222,000. Revenues surge 55.4% to $27.76 million, but costs jump by 67.5% to $40.8 million. The operating loss also rises, to $13.65 million, as does the net loss, to $13.02 million.
On February 10, 1999, the company reservations system is switched over to SABRE. Simultaneously, an additional reservations center is established at the company’s Greensboro headquarters.
Nonstop daily roundtrip service is inaugurated on March 4 from Philadelphia to Orlando, together with direct service to Orlando from Pittsburgh. New nonstops are begun on March 15 from Greensboro to Boston, bringing to three the number of daily roundtrips flown between Piedmont Triad International Airport and Logan International Airport.
Simultaneously, the company doubles its hub operation at Greensboro by doubling its daily scheduled flights from that point to Orlando, Philadelphia, Pittsburgh, and Trenton.
Eastwind is named the “official carrier” for the International Home Furnishing Center’s “IHFC market weeks” to be held on April 15-23 and October 14-22.
The carrier is plagued by difficulties at the end of the first quarter and beginning of the second, many involving flight delays, cancellations, and re-routings. On April 10, passengers destined for Trenton refuse to get off a plane at Greensboro for fear they will be stranded. It becomes necessary to call airport security.
Daily B-737 nonstop roundtrips begin on April 15 from Greensboro, Philadelphia, and Orlando to Miami (MIA). Eastwind also offers one-stop service from New York (LGA) to Miami, as well as connecting service from Pittsburgh, Boston, and Trenton.
On April 16, passengers arriving at Greensboro are so irate that they begin screaming at company personnel. One aircraft, due to depart Boston at 6 a. m., had not departed until afternoon, arriving at 6:30 p. m. As delays continue, 120 passengers become unruly to a point where sheriff’s deputies are summoned to backup airport security men attempting to restore order. The aircraft finally departs for Orlando at 8 p. m.
Also in April, the carrier comes under scrutiny of the New York State Attorney General’s office for alleged double billing of passengers for the same flights. Company officials are called to Albany, where they promise to improve customer service, prevent overbilling, and reduce flight delays.
The situation does not seem to improve; by May 29, the state’s top law official has received 114 more complaints. These and other unreported concerns lead the FAA to step up safety inspections in June. On the other hand, the federal government grants permission for a fleet expansion of from five aircraft to seven.
On June 21, Eastwind announces that although it will halt its New York (LGA) service, it will resume flights to Tampa by mid-July.
On July 23, the company reports a suspension of service to and from Boston, Pittsburgh, and St. Petersburg. The lapse, due to “unforeseen business circumstances,” should end within six months.
Six days later, on July 29, a more terse announcement is made to the effect that President/CEO Hallcom has been “relieved of his duties” and that Vice Presidents Scott Glasser and Michael Kopay are no longer employed. The management consultants Mort Beyer & Agnew are brought in to restructure all levels of the airline.
The company is put up for sale on August 20. Potential buyers are advised that a minimum bid of $10 million will be accepted by Morten Beyer & Agnew, who have been retained to handle the transaction.
On August 26, the New York based leasing concern C. I.S. sues the company for $1.5 million, which has not been paid on the lease of a B-737 and six engines.
Service between Trenton, Greensboro, and Orlando are suspended on September 8, with the last flight, between Greensboro and Trenton, transporting just 10 passengers.
Revenues during the final year have dropped 52.2% to $13,269,000 while expenses, despite their falling 53%, are still $19,169,000. Losses have “improved,” but still cannot be sustained, reaching $5.9 million (operating) and $5.88 million (net).
EasyJET AIRLINES, LTD.: London Luton Airport, Easy Land, Luton, Bedfordshire, England, LU2 9LS, United Kingdom; Phone 44 (0152) 44 55 66; Fax 44 (0152) 44 33 55; Http://www. EasyJet. com;
Code EZY; Year Founded 1995. This no-frills, low-fare carrier modeled on Southwest Airlines (2) in the U. S. is established at London (CTN) on October 18, 1995. Shareholding is divided between 30-year-old Chairman Stelios Haji-Ioannou, Polys Haji-Ioannou, and Clelia Haji-Ioannou. The chairman, son of a Greek Cypriot shipping tycoon who now owns his own shipping business, insists to the media that everyone refer to him only by his first name and requires that his employees paint everything, wherever possible, in his favorite color-orange. The new chairman, according to the December 18 issue of the London Financial Times, also faces a whispering campaign because of a four-year-old Mediterranean incident. Following the loss of the tanker Haven off Genoa in 1991 in which five crewmen die, Stelios and his father were indicted in Italy on manslaughter charges. Both will, eventually, be cleared.
Meanwhile, Raymond Webster is appointed managing director of the new airline and he recruits a workforce of 200. An arrangement is worked out with Herb Kelleher’s company to send all new management employees to the Dallas headquarters of Southwest Airlines for three days of training. Unlike rival Debonair Airlines, Ltd., but like its Southwest Airlines model, easyJet encourages its cabin and flight crews to dress casually; jeans and orange sweatshirts are approved attire.
A wet-leased Boeing 737-204, first flown by Britannica Airways, Ltd., is acquired from GB Airways, Ltd. and painted in white livery with orange tail and engine nacelles. Reflecting its 100% direct-sale product, the company’s U. K. telephone reservations number and the words “Call Us Direct in the U. K.” are painted along all of its aircraft fuselages above the windows. No travel agents or reservations system will be employed-10% commissions are thus saved from not employing the agents along with another ?2.5 per booking by skipping a reservations system. The GB Airways, Ltd. charter also covers maintenance and insurance while ground handling is also contracted out. Flying from Luton Airport rather than London (LHR) is expected to save easyJet ?10 per passenger in landing fees.
Ticketless travel and open seating are also company features. There is no interlining and accounting is kept simple under the basic marketing concept of payment up front (cash or credit cards only, no checks) with no cancellations and no refunds. There will be no overbooking or backup aircraft. Passengers show up at the airport, present their money or credit cards, and are given a plastic boarding pass. Once on the Boeing, customers hand in their boarding passes, which are reused. It also becomes company policy to set its highest tariffs at half or less than its competitors full economy fares. Although drinks and snacks will be available, they are not complementary; peanuts, beer, or coffee must be purchased. On the other hand, the company will offer inexpensive deals on the Thameslink rail and coach service to Luton Airport.
Revenue flights commence on November 10 linking the carrier’s base with Glasgow five times daily. Six-times-daily service to Edinburgh begins on November 24 following delivery of the second GB Airways, Ltd. B-737-204, which has a small Scottish flag painted next to its registration number.
Services are initiated thrice daily to Aberdeen and daily to Inverness on January 26, 1996. As part of the publicity preceding this route, a B-737-204 has a cartoon image of the Loch Ness monster painted along the side of the fuselage. “Nessie” is green with orange polka dots and swims along under the carrier’s phone number.
AB-737-3M8, chartered from Monarch Airlines, Ltd., joins the fleet in mid-April and five-times-daily flights commence on April 24 to Amsterdam, the company’s first Continental destination.
Since January, the carrier has sold 150,000 tickets. When the telephone number changes, the aircraft are repainted; the phone digits are painted billboard-size along the planes’ sides. Twice-weekday and thrice-weekend Barcelona and Nice flights commence during June.
When KLM (Royal Dutch Airlines, N. V.) adds capacity in July and lowers roundtrip fares to just ?70 to compete on the London (CTN) to Amsterdam route, easyJet finds itself engaged in a fierce price war with the Dutch flag carrier. The new Dutch fares are marketed to customers seeking to switch to a more traditional service; the promotion is titled “Easy Choice.” The approach is the same taken simultaneously by KLM partner Air U. K., Ltd. in its contest with new entrant World Airlines, Ltd. on the route from London (LCY) to Amsterdam.
KLM makes a significant error in August when one of its officials grants an interview to the Financial Times. The executive is quoted as saying that the “Easy Choice” price cuts are necessary “to stop the growth and development of easyJet and to make sure that this newcomer will not be able to secure a solid position in the Dutch market.” At this point, Chairman Haji-Ioannou directs the company’s legal department to send KLM a letter that accuses it of abusing its market dominance and asking it to cease and desist from such practices as selling seats below their cost.
KLM does not make the requested changes and on October 9 Haji-Ioannou lodges a 22-page complaint (including the Financial Times article) with the Competition Directorate of the European Commission at Brussels, stating that the Dutch major is engaged in predatory pricing tactics designed to chase easyJet out of Schiphol. The EU investigates.
When Kevin and Jackie Freiberg publish their book Nuts!: Southwest Airlines’ Crazy Recipe for Business and Personal Success late in the year, Chairman Haji-Ioannou makes it required reading for all employees.
A support and wet-lease contract is now signed with the charter division of Air Foyle, Ltd. easyJet is the first contract customer for its new air operators certificate program under which the veteran U. K. carrier, known for its outsized freighting with the Antonov An-124 Ruslan, will offer management, business, and engineering expertise plus its AOC to assist the start-up as it seeks viability. The program is similar to one instituted by British World Airlines, Ltd. for Debonair, Ltd.
Airline employment stands at 250 in 1997.
British Airways, Ltd. (2) Chairman Robert Ayling invites Chairman Haji-Ioannou and Managing Director Webster to discuss the major’s possible investment or link-up. Although a meeting is held, BA soon indicates that it will not be able to receive CAA approval for any union.
Owner Haji-Iaonnou again complains to the EU in April that KLM (Royal Dutch Airlines, N. V.) has employed predatory pricing techniques and dominant market position, in violation of EU competition rules, to drive his carrier out of the Netherlands. The EU issues a statement of objections against the major’s alleged behavior and officials even go so far as to raid the Dutch line’s offices seeking documents.
For the second time in a week, London (CTN) is subjected to a bomb threat on April 25. As in the earlier incident, easyJet is able to operate its flights in and out of the airport without using the terminal building.
The company’s fourth “Baby Boeing,” a Dash-3Y0 also previously flown by Monarch Airlines, Ltd., is received and allows return of the two leased Dash-204s on April 30.
Weekly roundtrip flights from Amsterdam to Nice commence on May 3. Another B-737-300 will arrive in May and three more during the fall. Thrice-weekly flights from London (CTN) to Aberdeen commence on May 15, but because of a delay in the delivery of the new Boeings, these must be cut back to weekly service two weeks later.
The carrier, on June 12, announces that it will cut its weekday return flights between London (CTN) and Aberdeen to two per day on July 18 because it is having problems meeting the Aberdeen Airport curfew.
On June 13, Chairman Haji-Ioannou, speaking at the Financial Times press conference at the Paris Air Show, announces that he has placed a deposit with Boeing for 12 new B-737-300s, valued at $500 million.
In July, the city council of the Borough of Luton announces that it is seeking a commercial partner. To win the stake and a management contract, upwards of ?170 million in equity investment will be required. Chairman Haji-Ioannou approaches the politicians with a plan that would see the airline buy in and the airport expanded through the addition of a new terminal and additional taxi way space. Competing Debonair Airlines, Ltd., which also uses the airport, opposes the easy-Jet move.
The Aberdeen service from London (CTN) is cut to twice daily on July 18.
In mid-September, the company makes its first direct buy from Boeing, placing a $500- million order for 12 new B-737-300s. The cost of the equity portion of the jetliner purchase will be covered by a CAA bond refund. When delivered in mid-1998, the aircraft will allow the carrier to spread its low-cost wings deeper over the Continent.
Also during the month, the EU Commission holds hearings into allegations that KLM (Royal Dutch Airlines, N. V.) has engaged in unfair practices.
On September 21, the order with Boeing for 12 new B-737-300s is confirmed.
At the beginning of October, British Airways, Ltd. (2) announces that it is switching the London terminus of its Inverness route from Heathrow Airport to Gatwick and franchising the service to its subsidiary British Regional Airlines, Ltd. At the same time, easyJet announces that it will start a morning B-737-300 roundtrip from Inverness to London (Luton) to fill the gap left by BA.
The CAA awards easyJet its own air operator’s certificate on October 8.
Daily roundtrip flights commence on December 5 between London (CTN) and Palma de Mallorca.
When British Airways, Ltd. (2) announces plans in December for the creation of a low-fare, no-frills airline for the spring of 1998, Chairman Haji-Ioannou immediately protests and threatens to sue the major if it continues with its strategy. easyJet’s chairman will now withdraw his claim against KLM (Royal Dutch Airlines, N. V.), which he had a good change of winning, to allow the EU Commission’s Competition Department to focus its attention on the new BA threat.
A seventh B-737-300 is delivered at Christmas.
Traffic figures are provided for the fourth quarter and show bookings of 301,482 passengers.
Late in January 1998, British Airways, Ltd. (2) announces that the name finally chosen for its low-cost unit will be GO. The new unit will be based at London (STN) and commence operations in May with eight B-737-300s leased from the parent. easyJet Chairman Haji-Ioannou calls for an investigation of the new entrant by the CAA, calling it a camouflaged ploy designed to drive the other British discount operators out of business before again raising ticket prices. He specifically seeks a court injunction against the new operation, pointing to BA’s guarantee of leases on eight B-737-300s and claiming that the pledge will allow the new entrant to obtain the aircraft at below market value, a move which is against European Union law. British Airways, Ltd. (2) is not put off by easyJet’s threats and throughout the first two quarters pursues its goal of launching the low-cost subsidiary. Plans are carefully laid not to compete on routes flown by its discount rivals.
Early in February, an $11-million offer is made for the acquisition of Air Holland, N. V. Even after the tender is increased to $12 million, shareholders in the Dutch airline reject the easyJet offer on February 10.
At the end of February, BA rejects easyJet’s claims that it will abuse its dominant market position by cross-subsidizing GO through the guarantee of the new entrant’s leases for eight B-737-200s.
On March 26, Haji-Ioannou’s carrier purchases 40% shareholding in the Swiss charter line TEA-Basel, A. G. The U. K. airline has the option to increase its stake in the Basel-based line to 90% and to refocus the company as a discount company and franchise partner, easyJet Switzerland, A. G. The equity boost is dependent upon Switzerland’s joining the European Union “open skies” arrangement. The company remains Swiss-registered, with the same Swiss staff and management. The franchise arrangement with TEA-Basel, A. G. physically begins on May 1 as one of the TEA aircraft begins flying on the Geneva-London (CTN) route which easyJet already serves.
After hearings on May 11-12, a U. K. high court denies a request from easyJet for an immediate injunction to prevent British Airways, Ltd. (2) from guaranteeing the leases of “Baby Boeings” that will be employed by the low-cost GO division. It does, however, promise that, within two months, it will hear easyJet’s original complaint regarding the major’s unfair subsidization of GO through aircraft charter guarantees.
With all of the pieces in place, GO launches services from London (STN) to Milan and Rome on May 22 with three B-737-200s. Among the passengers on the inaugural Rome service aboard for a “bit of fun” is Chairman Haji-Ioannou, plus six colleagues, all dressed in bright orange company overalls.
While easyJet and Debonair, Ltd. attempt to limit GO via legal and regulatory means, an even stronger competitor threatens to take it on head-to-head in the marketplace. In a speech before the Aviation Club at London on June 1, Michael O’Leary, CEO of Dublin-based Ryanair, Ltd. pledges that his concern “will compete with lower fares rather than wait for the bureaucrats in Brussels to rescue us.”
Leading aviation barrister Robert Webb, who had won the high court ruling for easyJet in May and had previously represented Virgin Atlantic Airways, Ltd. during the 1993 “dirty tricks” libel action, is recruited on June 30 to serve, effective September 1, as general counsel from British Airways, Ltd. (2). The discount carrier announces its “regret” at the lawyer’s change of sides.
On July 1, the company begins advertising for its new deep-discount services between London and Athens, using the theme “Who needs travel agents?” to emphasize that travelers can book directly without tickets or agents. The Greek travel agents union promptly takes easyJet to court over this promotion and wins a temporary ban of such ads on July 9 from a judge who agrees that they offend the integrity of all travel agents. A trial is ordered.
Daily roundtrips between London (CTN) and Athens commence on July 10; the service is doubled to twice daily a week later.
Expecting to boost sales through a controversial surprise move, Chairman Haji-Ioannou promises to give out tickets to those who will come to the carrier’s Athens trial on July 21. As a result, hundreds pack the courtroom early that morning expressing their support for easyJet’s discount approach. At the end of the proceedings, the easyJet chief gives away 800 free tickets to the crowd that had backed him during the day.
On July 28, easyJet places a $650-million order with Boeing for 15 Next Generation B-737-700s, with options for 15 more; deliveries are scheduled to begin in October 2000.
The first of 12 ordered B-737-300s arrives in August.
GO inaugurates thrice-daily service on September 8 between London (STN) and Edinburgh; the route is the first flown directly in competition with easyJet. Ten days later, Chairman Haji-Ioannou’s company begins twice-daily roundtrips between London (CTN) and Belfast.
Chairman Haji-Ioannou announces the TEA-Basel, A. G. franchise agreement to the British Swiss Chamber of Commerce meeting in Geneva on September 25. At this point, it is announced that TEA-Basel will transfer its headquarters from Basel to Geneva the following April.
On October 10, GO reduces all of its Tuesday, Wednesday, and Thursday midweek fares for the next two months. The promotion requires a minimum stay of two nights. The ticket price cuts include a reduction on the London (STN) return routes to Rome, Lisbon, and Bologna from ?100 to ?60; from London (STN) to Milan and Copenhagen from ?100 to ?50; and from London (STN) to Edinburgh from ?70 to ?40. The latter rate is carefully set as to remain ?2 higher than that of competing easyJet.
Claiming that the GO ?40 promotional fare on the London (STN) to Edinburgh route is designed to drive his London (CTN) to Edinburgh service out of business, easyJet Chairman Haji-Ioannou organizes a high-profile protest flight from London (CTN) to Brussels on October 27 to deliver a formal complaint to the EU Commission. In a statement, the discount airline’s leader indicates that he has been forced to match the GO fare, which is believed to be predatory.
Repainted in easyJet colors, a TEA-Basel, A. G. Boeing, doing business as easyJet Switzerland, A. G., initiates twice-daily nonstop return service between London (LTN) and both Zurich and Geneva.
Chairman Haji-Ioannou on November 16 announces the formation of a new hub at Liverpool that will become its second British base after London (CTN).
In December, it is reported that for the first three quarters of the year, the airline has flown 1.7 million passengers and generated revenues of ?77 million ($126 million).
At the end of the year, two newly delivered B-737-33Vs, together with their ground staff and air crews, are stationed at the airport. In continuation of the on-going war over GO, both wear billboard-sized orange titles along both sides of their white fuselages that read “Stop BA Stop.”
Enplanements for the year total 1.66 million, while 7,000 FTKs are also operated. Additionally, as the chairman will note in early February, the company generates its first profit, ?2.3 million ($3.6 million).
Twice-daily roundtrips from Liverpool to Barcelona commence on January 7, 1999, with a daily return service beginning the next day to Geneva.
By the end of the month, TEA-Basel, A. G. doing business as easyJet Switzerland, Ltd., is operating thrice-daily nonstop roundtrips between London (LTN) and Zurich and four return flights every day from Luton Airport to Geneva.
In February, the airline joins with FLS Aerospace, Ltd. to form the joint-venture maintenance concern EasyTech, Ltd. Based at London (LTN), the operation is 80% owned by easyJet, cooperates closely with the airline, and adopts its corporate culture and practices. The new company supports the easyJet B-737 fleet in a highly integrated fashion.
In March, daily roundtrips start to Malaga along with twice-daily return flights to Belfast. During the month, Chairman Haji-Ioannou announces that a minority stake in the airline will be floated on the London Stock Exchange and New York’s Nasdaq in early 2000. Simultaneously, the complaint lodged with the EU Commission earlier concerning GO is dropped.
On the evening of March 1, Barbara Cassani, CEO of GO, delivers the annual Lindbergh Lecture before a London meeting of the Royal Aeronautical Society. Having agreed to take questions afterward, she and others are startled when the first question, concerning financial performance, is posed by none other than Stelios Haji-Ioannou, chairman of easyJet.
The number of daily roundtrips between London (CTN) and Aberdeen, Scotland, is doubled to two on March 28.
By the end of April, easyJet has received six B-737-300s, with six more to arrive by the end of the year. Having trumpeted the arrival of the new aircraft around Europe, company officials are somewhat surprised on May 5 to be served an injunction by Olympic Airways, S. A. regarding its advertising campaign in the Greek press.
On May 10, Chairman Haji-Ioannou informs the press that his nofrills carrier will employ some of the cash raised in its Y2K stock market flotation to upgrade services from London (CTN) to Amsterdam, Belfast, Edinburgh, and Glasgow.
Occupation of the new Geneva headquarters for TEA-Basel, A. G. doing business as easyJet Switzerland, A. G., is completed on May 21.
Plans are announced for the inauguration of new services on July 28 from Geneva to Amsterdam, Barcelona, and Nice.
The first easyEverything, a warehouse-sized Internet shop, opens in London’s Victoria Station in June.
In July, daily roundtrips are inaugurated from Liverpool to both Belfast and Malaga.
By the end of the first full week in July, easyJet Switzerland, A. G. has sold thousands of seats for the inauguration of service on its new route from Geneva to Barcelona.
On July 12, a spokesman for Swissair, A. G. holds a news conference to remind the discount operator that a national law enacted the previous
November grants the SAirGroup subsidiary a monopoly over the Barcelona route and any others that it has not abandoned. The combative easyJet Chairman Haji-Ioannou promises a court battle.
Thrice-daily return service from Liverpool to Belfast begins on July 15; simultaneously, daily roundtrips are inaugurated from London (LTN) to Malaga. The Swissair position is confirmed by Transport Minister Moritz Leuenberger on July 19.
The authority of easyJet Switzerland, A. G. to operate to Amsterdam and Nice is, however, confirmed as Swissair, A. G. had dropped those routes from its regular schedules before the November law had taken effect.
Beginning on July 29, 3,500 passengers with confirmed Barcelona tickets have their fares refunded in cash, are offered free roundtrips from Geneva to Barcelona, and are encouraged to contribute to a company fund set up “for the protection of consumer interests against Swissair.”
As the latest airline to be subjected to the scrappy tactics of the British discount carrier, Swissair, A. G. and its executives must now stand by as easyJet Switzerland, A. G. begins to bypass the November law by offering daily “charter” flights from Geneva to Barcelona, using the TEA-Basel, A. G. tour operator license, which is still valid.
Formerly CEO of FLS Stansted, Vilhelm Hahn-Peterson is named chief operating officer on August 9.
The company and its chairman are profiled in the BBC-TV production TraiBc, which is broadcast over BBC-2 on August 12.
Queen Elizabeth II opens the new terminal at Luton Airport on November 25. In something of a public relations gaff, Chairman Haji-Ioannou, who is in a dispute with the facility, fails to attend.
For the 12 days after December 1, easyJet operates additional flights from London (LTN) to both Glasgow and Edinburgh.
Daily B-737-33V roundtrips (through March) are inaugurated in mid-December between London (LGW) and Geneva.
A special hour-long episode of London Weekend Television’s Airline is screened on December 27, showing the run up to Christmas by employees of easyJet.
Passenger boardings this year increase 68.9% to 2,982,000.
The workforce at the beginning of 2000 stands at 1,200. The B-737-300 fleet includes 2 Dash-3M8s, 1 each Dash-3Q8, Dash-3Q8-3Y0, and Dash-3Q8-375, and 12 Dash-33Vs. Also operated is a Dash-59D, leased from British Midland Airways, Ltd.
An additional weekend roundtrip is added on January 14 between Liverpool and Geneva to meet a growing demand from independent ski travelers.
On February 3, Chairman Haji-Ioannou presents the Greek embassy in London with a check for ?10,000 collected since September for victims of the earthquake that hit his homeland.
In early February, the company becomes involved in a fiscal dispute with the management of Luton Airport over landing fees. Luton claims that it has given the discount operator a low rate; easyJet claims the charges are too high and threatens to take the matter to the CAA. The low-fare airline is expected to account for up to 60% of the airport’s passengers this year.
Chairman Haji-Ioannou presents the 2000 Lindbergh Lecture before a large audience of the Royal Aeronautical Society on March 1. Two days later, his low-cost carrier begins to offer ?5 discounts to passengers booking their flights over the Internet.
On March 10, a deal is completed with Daimler Chrysler for the lease of 5,000 Mercedes A-Class automobiles that will be booked via the company’s brand new Internet-based car rental business. Coordinated with the airline’s airport destinations, the service by easyRentacar will charge drivers a daily fee of ?15.
Daily B-737-33V nonstop roundtrips are introduced on March 26 from Liverpool to Palma de Mallorca. Four days later, a firm order is placed for 17 Next Generation B-737-73Vs, to be delivered between October and May 2004.
The number of daily return frequencies between London (LTN) and Nice is doubled from three to six on April 28. The easyRentacar service is introduced at the end of April; the initial fee is even less than earlier advertised: ?9.
In a move to increase its online bookings to 70%-75% by the end of the year, the airline requires, beginning on May 1, that all bookings made more than two months in advance must be made online with a credit card. Two days later, the company reveals that has doubled the number of its flights in June and now operates almost 1,000 flights across its network of 28 services serving 18 popular business and leisure destinations.
On May 12, Donaldson, Lufkin & Jenrette, and UBS Warburg are appointed joint coordinators of the carriers fall initial public offering, proceeds from which will cover expansion and aircraft acquisition costs. An additional weekday roundtrip between London (LTN) and Palma de Mallorca begins on May 26.
When British Airways, Ltd. (2) and KLM (Royal Dutch Airlines,
N. V.) announced their merger discussions on June 7, easyJet Chairman Haji-Ioannou demands that the two turn over to his and other carriers sufficient slots to preserve competition on the U. K.-Amsterdam route.
An ATC computer failure on June 17 forces the company to cancel all of its flights from Luton Airport. At the end of the month, the London City public relations firm of Granfield is asked to handle news releases relating to the company’s initial public offering.
When the fourth six-episode series of London Weekend Television’s Airline series airs on June 23 on ITV 7.5 million viewers tune in. The program shows a behind-the-scenes look at easyJet and other operators.
On July 4, the company begins driving a bright orange double-decker bus around Glasgow to promote its service to that city.
To replace a Dash-3M8, a newer B-737-33V is sent over to easyJet Switzerland, A. G. on July 10, but, prior to its arrival, someone has forgotten to paint out the U. K. telephone reservation number that appears in large titles along the orange fuselage. The company boasts on July 14 that, for the first time in history, it has flown over a million passengers from Liverpool in a single year.
Chairman Haji-Ioannou bluntly denies media rumors on July 18 concerning a possible purchase of Olympic Airways, S. A. “I wouldn’t take Olympic,” he says, “not even as a gift!”
Also in July, the First Choice tour concern’s in-house carrier Air 2000, Ltd. becomes the first charter airline to mount a serious challenge to the low-cost carriers easyJet, Ryanair, Ltd., and GO, the discount brand of British Airways, Ltd. (2).
Air 2000, Ltd., which has flown scheduled service to Cyprus since 1994, now launches scheduled leisure flights from eight U. K. airports to Alicante, Faro, Lanzarote, Malaga, Palma, and Tenerife. Unlike the nofrills airlines, passengers are offered free drinks and in-flight entertainment. easyJet now negotiates an exclusive discounted ?8 rail fare package with Thameslink Trains for its passengers traveling between central London and Luton Airport.
On August 10, H. P. Howe of Nottingham is announced the winner of the first easyJet Gifts photographic competition. He will receive a pair of free flights every month.
It is reported on August 13 that the company had sold 132,371 seats online the previous week; this figure is 80% of all company tickets sold during the 7 days. At the end of the month, the company’s achieves a market victory when Air France quits the lucrative Nice to Geneva route.
When French truck drivers protest fuel prices on September 7, easy-Jet is able to maintain its current schedule from Nice. Although similar protests and blockades in support of the campaign to reduce fuel costs cause a great deal of disruption throughout the U. K. over the next five days, the airline, nevertheless, flies there as usual. Also during September, a B-737-3Y0 is leased from British World Airlines, Ltd.
It is reported on October 2 that, for the first time, more passengers are flying to Amsterdam with easyJet from London (LTN) than with KLM U. K., Ltd. from London (STN).
A press release on October 9 reports that the company is now repainting its fleet, replacing the telephone number with “easyJet. com— the web’s favourite airline.”
On October 12, London Weekend Television confirms August media reports that it is filming another installment of its popular Airline series, featuring behind-the-scenes reviews of life at easyJet, for release in the spring. The next day, the carrier inaugurates an exclusive discounted ?8 rail fare package with Thameslink Trains for its passengers traveling between central London and Luton Airport.
The company’s first Next Generation B-737-73V is delivered on October 15. By this time, all of the units of the B-737-300 fleet have been repainted and given large “easyJet. com” titles.
Roundtrip frequencies between Liverpool and Belfast are boosted from three to four daily on October 29, while daily return flights from London (LGW) to Geneva are simultaneously doubled to two. The number of daily flights is also increased from London (LTN) to Edinburgh (5 to 6) and to Belfast (4 to 5. The next day, it is announced that direct services will begin on January 5 from Amsterdam to Edinburgh, Belfast, and Nice.
It is announced on October 31 that four new flights will be inaugurated from Amsterdam on January 5: one each to Belfast and Nice and two to Edinburgh. The same day, the BBC reports that the company will float approximately 25% of its estimated ?564- million value on the London Stock Exchange. Conditional trade, before investors are given their certificates, will begin on November 15 and unconditional dealing a week later, on November 22. Funds earned will be employed to purchase 32 new Next Generation B-737-73Vs.
The company celebrates its fifth birthday on November 10, during which period easyJet has flown 12 million passengers.
As part of the continuing rationalization of the short-haul operations of British Airways, Ltd. (2), CEO Eddington announces at the beginning of the second week of November that the low-cost subsidiary GO will be sold. Although London (STN)-based rival Ryanair, Ltd. immediately indicates that it is not interested in purchasing the operation, GO’s most bitter rival, easyJet, indicates that it would “at the right price.”
The Advertising Standards Association rules on November 15 that easyJet is entitled to call itself “the web’s favorite airline.” It rejects a complaint regarding the use of the phrase lodged by the British Airways, Ltd. (2) subsidiary GO.
Approximately 25% of the company (63,000,000 shares) is floated to large investors on the London Stock Exchange, also on November 15, with shares initially trading at 310p each, rising to 344.5p later in the day. With valuation already at ?868 million, it is anticipated that the initial public offering will be 7 to 10 times over-subscribed. The company’s staff has already been given an opportunity to buy shares ahead of the floatation, but most are tied to a one-year lock-in period. By the next day, value has increased by 11%. The second Next Generation B-737-73V is delivered on November 22, the same day unconditional dealing in easyJet shares begins on the London Stock Exchange. When the tally is finally in, easyJet will have raised over ?190 million ($275 million) in its offering.
The media reports on December 7 that former international rugby player Tony Underwood has joined easyJet as a pilot.
Chairman Haji-Ioannou is added to The Guinness Book of World Records on December 8 as the youngest person (age 28) to found an international scheduled airline.
The Liverpool to Belfast service is increased to six weekday and four weekend return flights on December 15, the same day frequencies are increased from thrice daily to four a day between Liverpool and Amsterdam. Also on December 15, the third new Next Generation B-737-73V is delivered.
On December 22, it is announced that daily nonstop flights from Amsterdam to Venice will start on January 1.
The same terrible winter weather that causes so many flight cancellations in the U. S. also impacts the U. K. Early in the new year, easyJet will seek damages from the airports at Liverpool and London (LTN) for the forced cancellation of 187 of its flights due to their alleged failure to promptly remove snow during the last four days of 2000. Indeed, police must be summoned to both airports on the morning of December 30 to break up disturbances by over 200 stranded people.
Despite the weather, passenger boardings for December total 491,069, compared to 381,962 in December 1999.
At year’s end, company employees look forward to the initiation of services from Amsterdam to Nice, Edinburgh, and Belfast on January 12. In the throes of rapid expansion, the company must also undertake a major pilot recruiting campaign. It will soon advertise for experienced captains offering not only high salaries, but a “golden hello” signing bonus of ?30,000 ($43,500) a head as well.
Enplanements for 2000 as a whole total 5.9 million.
EasyJET SWITZERLAND, A. G: 88 Ave. Louis Casai, Geneva, 1215, Switzerland; Phone 41 (22) 788 8820; Fax 41 (22 ) 788 2700; Code TSW; Year Founded 1998. On March 26, 1998, Stelio Haji-Ioannou’s low cost carrier, easyJet Airlines, Ltd. purchases 40% shareholding in TEA-Basel, A. G. The U. K. airline has the option to increase its stake in the Basel-based line to 90% and to refocus the company as a discount company and franchise partner, easyJet Switzerland, A. G. The equity boost is dependent upon Switzerland’s joining the European Union “open skies” arrangement. The company remains Swiss registered, with the same Swiss staff and management.
The franchise arrangement with easyJet Airlines, Ltd. physically begins on May 1 as one of the TEA aircraft begins flying on the Geneva-London (LTN) route, which easyJet already serves.
Two B-737-7Q8s arrive during late spring under charter from the International Lease Finance Corporation (ILFC). They are immediately placed into charter service to destinations in the Mediterranean. easytJet Chairman Haji-Ioannou announces the franchise agreement to the British Swiss Chamber of Commerce meeting in Geneva on September 25. At this point, it is reported that TEA-Basel will transfer its headquarters from Basel to Geneva next April 1.
Beginning on November 5, nonstop franchise scheduled return services are offered thrice daily between London (LTN) and Zurich and four times a day from Luton Airport to Geneva.
By the end of January 1999, TEA-Basel, doing business as easyJet Switzerland, Ltd., is operating thrice-daily nonstop roundtrips between London (LTN) and Zurich and four return flights every day from Luton Airport to Geneva.
Occupation of the new Geneva headquarters for TEA-Basel, doing business as easyJet Switzerland, A. G., is completed on May 21. Plans are announced for the inauguration of new services on July 28 from Geneva to Amsterdam, Barcelona, and Nice.
By the end of the first full week in July, easyJet Switzerland, A. G. has sold thousands of seats for the inauguration of service on its new route from Geneva to Barcelona. On July 12, a spokesman for Swissair, A. G. holds a news conference to remind the discount operator that a national law enacted the previous November grants the SAirGroup subsidiary a monopoly over the Barcelona route and any others that it has not abandoned. The combative easyJet Airlines, Ltd. Chairman Haji-Ioannou promises a court battle.
Transport Minister Moritz Leuenberger confirms the Swissair position on July 19. The authority of easyJet Switzerland, A. G. to operate to Amsterdam and Nice is, however, upheld as Swissair, A. G. had dropped those routes from its regular schedules before the November law had taken effect.
Beginning on July 29, 3,500 passengers with confirmed Barcelona tickets have their fares refunded in cash, are offered free roundtrips from Geneva to Barcelona, and are encouraged to contribute to a company fund set up “for the protection of consumer interests against Swissair.”
The latest airline to be subjected to the scrappy tactics of the British discount carrier, Swissair, A. G. and its executives must now stand by as easyJet Switzerland, A. G. begins to bypass the November law. It offers daily easyJet Charter “charter” flights from Geneva to Barcelona using the TEA-Basel, A. G. tour operator license, which is still valid.
Regularly scheduled return service is inaugurated in December from Geneva and Zurich to London (STN/LGW). These complement flights already begun to London (LTN) and Liverpool.
With 220 employees at the beginning of 2000, the company is headed by Chairman Ernst Staehelin and Managing Director Markus Seiler. The fleet now comprises 3 B-737-33Vs and 1 B-737-3M8 transferred over from easyJet, Ltd.
At the beginning of April, the company uses a two-carriage city tram—painted in orange and white with the company’s telephone numbers—to drive about Geneva, encouraging voters to vote in the May Swiss Referendum in favor of accords with the European Union. Whether or not this particular effort succeeds with voters is unknown; however, the vote, cast on May 21, is positive.
To replace an older unit, a newer B-737-33V is sent over from easyJet Airlines, Ltd. on July 10, but prior to its arrival, someone has forgotten to paint out the U. K. telephone reservation number that appears in large titles along the orange fuselage. At the end of August, the company achieves a market victory when Air France quits the lucrative Nice to Geneva route.
The load factor for October is 85.3%, as compared to 79.9% in October 1999.
On December 15, daily return frequencies between Geneva and Liverpool are increased from one to two, with three on weekends.
EC XPRESS. See EASTERN CARIBBEAN EXPRESS, LTD. (EC XPRESS)
ECONOMY HELICOPTERS. See ERA AVIATION
ECUATO GUINENANA DE AVIATION, S. A. See EGA (ECUATO GUINENANA DE AVIACION, S. A.)
ECUATORIANA AIRLINES (EMPRESA ECUATORIANA DE AVIACION, S. A.): Calle R Victoria YAv Colon, Apartado 505, Torres de Almagro, Quito, Ecuador; Phone 593 (2) 563 003; Fax 593 (2) 563 920; Http://www. ecuatoriana. com; Code EU; Year Founded 1970. In 1970, CEA (Compania Ecuatoriana de Aviacion, S. A.) is reorganized; a new livery and logo are adopted for the new name, Ecua-torian Airlines. The fleet comprises 8 Lockheed L-188A Electras, 7 Douglas DC-6s, 1 DC-6A, 1 DC-6B, and 4 DC-4 freighters.
A DC-4 with two crew fails its takeoff from Miami on April 14 for a flight to Quito via Panama City; the plane crashes beyond the runway and slides 890 ft. before hitting a concrete abuttment. There are no survivors.
Although a second DC-6Ais received, severe financial difficulties are encountered in 1971.
A route is opened to Bogota in January 1972 and a DC-3 crashes at Sangai on March 14; there is no other information on the accident.
While en route from Quito to Guayaquil on May 23, an L-188A is captured by a hijacker, who demands that it return to its point of origin in order that he might collect a $40,000 ransom and a parachute. A military officer brings the demanded items aboard and, while pretending to show the pirate how to use the parachute, opens fire, killing the assailant and wounding the captain and a female passenger.
Santiago de Chile service is suspended on June 28 and, as the carrier’s financial woes deepen, the Ecuatorian government, on August 13, acquires 52% controlling interest. An L-188C is leased for two months at the end of the year.
The airline is reorganized as a mixed-stock company in 1973. Capitalization is raised to 100 million pesos, of which the government share is 51%. Ecuatoriana is now the country’s flag line.
As additional financial and managerial problems continue to plague the airline, it ceases trading on April 16, 1974. On July 31, it is nationalized, its shares being assigned to the Air Force’s airline TAME (Transportes Aereos Militares Ecuatorianos) on behalf of the government.
Gen. Carlos Banderas is appointed president and CEO.
The Electras become part of the TAME fleet and in August, Ecuatori-ana receives two former Pan American World Airways (1) Boeing B720-023Bs in compensation, employing them to restart Miami service on September 1. Meanwhile, a new logo and livery are introduced for the flag carrier, which is now described in marketing literature as “Le Linea Aereas en el Corazon del Mundo!”
In 1975-1976, the fleet is increased by the addition of another ex-Pan Am B-720-023B. It is at this time that the company introduces a striking livery designed to represent the jungles and wildlife of the country.
Additional overseas and regional routes are opened. By 1977, Ecuadorian jetliners are serving Buenos Aires, Caracas, Los Angeles, and New York.
Enplanements this year reach 150,926.
In 1978 , an order is placed for two B-707-321C Stratoliners.
Passenger boardings jump 21.8% to 193,233 and freight traffic soars 28.8%. Revenues accelerate 28.2% to $43.7 million, expenses are up 25.6% to 41 million, and the operating profit skyrockets 90.3% to $2.55 million.
The B-707-321Cs enter service in 1979. Bookings rise 18.6% to 229,318.
Increased fuel costs and recession impact upon the carrier in 1980-1981. Traffic and profits decline. One B-720-023B is sold, but a Douglas DC-10-30 is ordered.
On February 29 of the former year, an armed assailant with four hostages attempts to take over a B-707-321C on the ground at Guayaquil. Unable to gain access, the pirate simply surrenders.
Enplanements climb back to 220,000 in 1982.
Weekly joint flights are inaugurated with VARIG Brazilian Airlines (Viacao Aerea Rio-Grandense, S. A.) in April 1983 over a route from Rio de Janeiro to San Jose via Sao Paulo, Guayaquil, and Quito.
While trying to land at the Andean city of Cuenca, a B-707-321B strikes a mountain on July 11 and explodes (119 dead).
The decade-old St. Galen, Swissair, A. G.’s first DC-10-30, is purchased and delivered in September.
A total of 161,640 passengers are carried on the year, a significant decline. The operating loss is $3.87 million, but a small $350,000 net profit is realized.
The employee population in 1984 is 1,010. A DC-8F clips a bus and explodes on a building site while trying to take off from Quito on September 18; the crew and 60 people on the ground are killed.
Passenger boardings climb 10.2% to 180,441 and cargo increases 34.5% to 34.56 million FTKs. Revenues jump 11.6% to $61.9 million. The losses are $5.6 million (operating) and $3.8 million (net).
The workforce is cut 2.2% in 1985 to 988. Bookings jump 13.7% to 205,204 and freight accelerates 24.6% to 43.07 million FTKs. Revenues advance by 20.1% to $74.7 million and expenses increase 7.9% to $73.1 million. Profits are $1.59 million (operating) and $4.75 million (net).
Operations continue apace in 1986-1987 and by 1988 enplanements total 210,855. Income exceeds expenses during the latter year and generates an operating profit of $28.29 million. There is, however, a $7.18-million net loss.
Company employment is increased by a slight 0.7% in 1989 to 1,165 and the fleet now includes 1DC-10-30, 3 B-707-321Bs, and 1 B-707-321CF. Passenger boardings increase 17.9% to 256,826, but freight drops 8.5% to 60.04 million FTKs. Revenues increase 14.5% to $89.67 million, expenses rise only 1.4% to $50.7 million, and operating profit reaches $169,350. The net loss is cut to $70,461.
The number of workers grows by 2.3% in 1990 to 1,192. Customer bookings inch up 2.2% to 262,538, but cargo is off by 8.7% to 54.83 million FTKs. Revenues slide 0.3% to $90.2 million and expenses are higher. Consequently, the operating loss is $8.3 million and net loss totals $4.8 million.
Operations continue apace in 1991.
Two Airbus Industrie A310-324s are purchased for $120 million from the assets of Pan American World Airways (1); christened Ciudad de
Guayaquil and Ciudad de Quito, the two enter service in October over the company’s route from Miami to Los Angeles. The extended $14 mil-lion-per-year lease-purchase arrangement for the aircraft has been set up by a group of European banks.
In 1992 the fleet includes 2 Airbus Industrie A310-324s, 3 leased B-707-321Bs, 1 B-707-321CF, and 1 chartered DC-10-30. Revenues in the latter year total $98.4 million, but expenses are higher, forcing an operating loss of $18.9 million and a net loss of $4.7 million.
In 1993, Chairman/President Eduardo Emmanuel oversees a workforce of 1,165.
In addition to an all-cargo service to Panama City, Miami, and New York, international passenger flights are made from Guayaquil and Quito to Bogota, Buenos Aires, Cali, Caracas, Chicago, Lima, Los Angeles, Mexico City, New York, Panama City, San Jose, and Santiago.
In February, the company is unable to make its lease payment on the two A310-324s. Both aircraft are seized in Los Angeles in early March; however, one is released back into service after Ecuatoriana makes a $1.50-million payment.
In deep financial difficulty, the company returns Ciudad de Guayaquil and Ciudad de Quito in early April. It also arranges to return several chartered Stratoliners and sell its only B-707 freighter.
As the result of financial problems that lead to a lessor seizure of the DC-10-30—its last operational aircraft—in September, the company is forced to suspend operations in October. Its Ecuador-U. S. routes are assigned to SAETA Air Ecuador, S. A. At its closing, the airline has some $50 million in assets plus all of its other route rights.
Continuing efforts will be made over the next three years to restart the dormant flag carrier. In October 1994, the government of Ecuador selects Prudential Securities, SH&E, and Aviation Management Services, the latter based at Miami, as a consortium to which it can sell the company.
Legal and bureaucratic challenges to the Prudential-led consortium force Ecuador to postpone its March 1, 1995 25% sale of shares on its domestic stock exchange. In August, a controlling 51.1% interest is acquired by VASP (Viacao Aerea de Sao Paulo, S. A.) Davidson Botelho is named commercial director.
A single Douglas DC-10-30 is wet-leased from VASP and employed to resume operations in mid-1996. In December, a Boeing 727-2M7 formerly operated by Northwest Airlines, is acquired. Like the Douglas wide-body, it is painted in a blue-and-white livery with “Ecuatoriana” spelled out in billboard-sized letters down the fuselage windowlines.
Destinations visited from Quito in 1997 include Bogota, Buenos Aires, Caracas, Guayaquil, Lima, Manaus, Miami, Santiago de Chile, and Sao Paulo. In January, the Douglas is employed to resume services to New York (JFK).
A B-727F is delivered in April, followed by a second passenger trijet during the fall.
On October 17, arrangements are completed under which the company will replace the VASP DC-10-30 with an Airbus Industrie A310-304 previously operated by Sudan Airways Corporation.
By year’s end, the company flies to nine South American destinations, enplanements total 85,000, and the operating loss is $16.11 million, while the net loss is $13.55 million.
The company’s fifth aircraft, the Airbus, is received in January 1998. It is employed to initiate services to Madrid and Paris.
Passenger boardings increase 72% to 257,000, while freight traffic jumps 22.4% to 34.07 million FTKs. Revenues accelerate 46.3% to 62.08 million, while expenses rise 37.3% to $80.36 million. The operating profit climbs to $18.27 million, while the net loss declines to $11.51 million.
By the beginning of 1999, airline employment has been increased by 4.6% to 454.
Passenger boardings drop 36.7% to 157,000. Revenues plunge 50.2% to $30.9 million and expenses fall 57.2% to $34.4 million. The huge deficit in returns for the previous year improves as the operating loss totals $18.27 million and the net loss is $2.91 million.
A total of 410 workers are employed at the beginning of 2000, a 9.7% decrease over the previous 12 months. Only two B-727-287As remain in the fleet.
At the end of January, the company signs a wet-lease agreement with Air Jamaica, Ltd. (2). Honoring the commitment on February 1, an Air Jamaica A320-211 operates the first of 12 roundtrips from Guayaquil to New York (JFK).
On May 11, officials of the Brazilian carrier announce that they will soon sell all VASP (Viacco Aerea de Sao Paulo, S. A.) shareholding in LAB (Lloyd Aero Boliviano, S. A.) and Ecuatoriana to help meet its huge deficit problems.
On November 1, a two-year commercial agreement is signed with LanChile Airlines, S. A. to operate its aircraft on the Ecuadorian airline’s international routes beginning in December. The initial wet-leased and code-shared services will be flown from Guayaquil and New York (JFK). Later, flights will be made from Guayaquil to Miami via Quito will be added. The B-767-3Y0ER roundtrips, flown by LanChile, commence between Guayaquil and New York (JFK) on December 15.
ECUAVIA C., S. A.: Ecuador (1949-1994). Carlos J. Estrada establishes Ecuavia at Guayaquil’s airport in 1949 to offer passenger and cargo charters to surrounding communities and bush locations. Operations continue apace with little fanfare for the next 40 years.
In 1990, Estrada’s fleet includes 1 Piper PA-23 Aztec, 1 Piper PA-34 Seneca, 1 Piper PA-31-350 Navajo Chieftain, 1 Piper PA-31T Cheyenne, 1 Beech Super King Air 200, and 2 Cessna 188s. Enplanements total 3,600 and 78,000 pounds of cargo are flown. Revenues are $156,000 and a $28,000 net profit is generated.
Passenger boardings shrink to 2,100 in 1991 and cargo falls to 25,000 pounds. Revenues slide to $122,000 and net gain falls to $21,000.
In 1992, bookings increase to 5,600. Operating revenues are $546,
World History
