- The Washington Times - Tuesday, August 19, 2003

ORLANDO, Fla. - The crash of a DC-9 into the Everglades in May 1996, killing all 110 persons aboard, made an industry pariah of low-fare airline ValuJet.

A little more than seven years later, the airline, now known as AirTran Airways, has made a remarkable recovery.

So far this year, AirTran announced a $5 billion aircraft order, started offering cross-country service and reported its fifth consecutive quarterly profit at a time when financial fortunes are sagging for many major carriers.

“Six years ago, you had old planes, poor service, weak management,” said Ray Neidl, an airlines analyst with Blaylock & Partners LP in New York. “Everything has completely changed.”

AirTran officials say they plan to expand into new markets, most likely the West Coast and Midwest, particularly as American Airlines and other carriers reduce service to cities such as St. Louis.

“We can put airplanes anywhere and there’s nothing that anybody can do about it,” said Joe Leonard, AirTran’s chairman and CEO. “We’ll keep pushing our web out further and further.”

The airline last month placed an order for 50 new Boeing 737s and an option for 50 more, and ordered up to 10 Boeing 717s. Boeing beat European rival Airbus SAS in a highly publicized courtship for the order.

The airline this year began flying to Denver, Las Vegas and Los Angeles. AirTran already offers 492 flights a day to 46 cities, but it will grow even faster with plans to open in three to five new cities each year.

Most low-fare carriers try to distinguish themselves by offering more than just low fares, because major airlines, such as AirTran’s main rival out of Atlanta, Delta Air Lines, can always match its prices. JetBlue has onboard televisions and leather seats. Southwest has an irreverent sense of humor with its shorts-clad crew singing silly jingles. The old ValuJet had a cartoon critter logo that adorned its aircraft.

Alan Bender, a professor of airline economics at Embry-Riddle Aeronautical University in Daytona Beach, Fla., said he doesn’t know what’s distinctive about AirTran.

“I haven’t been able to figure out in the case of AirTran what their gimmick is,” he said. “I scratch my head at what makes AirTran special.”

The airline may lack a gimmick, but its turnaround is unprecedented in recent commercial airline history, Mr. Bender said. Other airlines, such as Air Florida, have sunk under the weight of fatal crashes. Air Florida folded in the late 1980s, just a few years after the 1982 crash of Flight 90 into a Washington, D.C., bridge, which killed 78 persons.

ValuJet appeared headed in the same direction.

Investigators blamed the May 1996 crash on explosive-tipped oxygen generators that ValuJet’s repair contractor, SabreTech Corp., improperly packaged as cargo. The airline was vilified, temporarily grounded, and its maintenance contractor was convicted of criminal charges.

Eight of the nine counts were later thrown out on appeal, but it marked the first time an aviation company was prosecuted in response to a U.S. air disaster. Insurers for the companies ended up paying the families of victims tens of millions of dollars.

“I would bet significant money that they wouldn’t have made it without the name change,” Mr. Bender said. “That was a stroke of genius because they couldn’t have been perceived by the public as more of a pariah than they were.”

AirTran’s road to rehabilitation began in 1997 when ValuJet acquired AirTran, dumped its cartoon critter logo and moved its headquarters from Atlanta to Orlando.

Next came a management shake-up in 1999 that brought a new team of executives headed by Mr. Leonard, former chief operating officer for defunct Eastern Air Lines. Only one member of the company’s 14-member leadership team worked for ValuJet at the time of the crash.

No factor, Mr. Leonard said, has been more important to the company’s turnaround than retiring the airline’s aging DC-9s and bringing in new, roomier Boeing 717s for short-to-medium hauls.

Industry experts said the new planes have dramatically improved AirTran’s safety record. “Now you look at the airline and it’s one of the most modern fleets in the world,” said John Wensveen, management professor at Embry-Riddle.

Like other low-cost carriers, AirTran also has been helped in the past two years by changes that shook the commercial aviation industry after September 11. Business travelers have been more cost conscience, aiding low-cost carriers. AirTran has been one of the few airlines to remain profitable during the recent slump in commercial flying, and in June it boarded 1 million passengers for the first time.

AirTran reported second-quarter net income of $57.2 million on $233 million in revenue, compared with $5 million in net income on $190 million in revenue a year ago. The company’s bottom line was helped by a $38.1 million cash payment from the federal government to blunt the effects of the Iraqi invasion.

Now, more than seven years after the ValuJet crash, many travelers don’t associate AirTran with its predecessor.

Mark Wolsonovich, 25, regularly flies on AirTran from Orlando to Chicago or Akron, Ohio, because he can save as much as $50 a ticket. He had no idea that the airline used to be known as ValuJet.

“To me, that’s one of those flukes,” Mr. Wolsonovich said of the 1996 crash, while waiting for a flight from Orlando to Chicago. “Things like that happen.”

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