Here's an article found in today's Times Picayune regarding this new airline and its struggles to get off the ground. Interesting stuff.
FLY? WILL IT
Despite a $600,000 state grant, Trans Caribbean Airways is still struggling to get off the ground, its April start put off until October
Tuesday September 16, 2003
By Crystal Bolner
A new airline that promised to begin offering six-days-a-week service between New Orleans and the Caribbean earlier this year still doesn't have the planes it needs to operate the proposed route.
Trans Caribbean Airways, which had planned to begin service in April, was given a $600,000 grant by the state to finance worker training. Much of that money has been spent -- some of it on job training for individuals who aren't even official employees of Trans Caribbean -- but the airline is still trying to recruit investors, lease airplanes and obtain federal certifications, said Al Menconi, chief executive of the airline. The delays likely will keep the airline grounded until October, Menconi said.
The airline is planning direct flights from New Orleans to St. Maarten-St. Martin and Curacao, where the company has its headquarters. The airline said it hopes to expand service to Brussels, Belgium, build a reservations center in Baton Rouge and possibly lease a 15,000-square-foot cargo service center in New Orleans.
The state's contract with Trans Caribbean requires the company to create 62 jobs in its first year of operation and an additional 100 jobs in its second year, said Sandy Deslatte, an Economic Development Department spokeswoman. The company's original business plan estimated it would have a total payroll between $2 million to $3 million per year, she said.
Regulations require the money the company receives through the state's work-force development program be spent on worker training and not facilities or startup costs.
But while Trans Caribbean already has spent $500,000 of the state grant, the airline now employs only 30 to 40 people, most of whom are unpaid.
The state said it has faith that Trans Caribbean will take flight.
"We are investing the taxpayers' dollars. We take that very seriously. We don't willy-nilly invest in every proposal that comes before us," said Don Hutchinson, secretary of the Economic Development Department.
Hutchinson said state officials closely scrutinized Trans Caribbean's business plan before investing the money. Trans Caribbean said it has shown good faith in its deals, and that it has as much to lose if the business fails.
State taxpayers aren't footing the entire bill for training the workers. The company is picking up the balance of any expenses not covered by the grant, Menconi said. So far, the state money has been used to train workers in airline accounting, ticketing, customer service and general computer use.
Of the 30 to 40 workers now employed by Trans Caribbean, a handful are in Baton Rouge, while others work in the Dutch Antilles and Europe. However, most positions are unpaid and the workers either have second jobs or are relying on their savings until the airline begins flights, Menconi said. Some are people identified by the airline as being likely future job candidates.
"While they were waiting for Trans Caribbean to start flying, some took other jobs. Some might be working for competitors or somewhere else, but hopefully those people still intend to work with Trans Caribbean in the future," Deslatte said.
The airline has faced delays not just in hiring but also securing the facilities for the small startup. New Orleans airport officials said they have met with Trans Caribbean officials about the airline's operation plans, showing them ticket counter and office space for their flight crews, but rental negotiations have not occurred.
"We're waiting on TCA to finalize all of their plans. There's nothing left for us to do until they get their planes and financing together. We're waiting on them," said Michelle Duffourc, a Louis Armstrong International Airport spokeswoman.
Airport and state officials said they are unsurprised by the delays, given the complexity of the task.
"Starting a new airline is difficult. Starting a new airline that's going to provide international service is even more difficult. Starting an airline in Louisiana -- well now, that's the most difficult of all," said Anthony Marino, aviation director at the Baton Rouge Metropolitan Airport, which is leasing office space to Trans Caribbean in Baton Rouge.
Marino said he was initially worried Trans Caribbean would fail financially and wouldn't be able to pay its rent. But so far those worries have proved unfounded. The company has been paying its rent on time, he said.
Trans Caribbean is still in the process of securing leases on four new Airbus A321 and A340 planes and getting federal flight certification in the United States, St. Martin and Curacao.
A Federal Aviation Administration spokesman said delays in getting flight certification are not uncommon for a new airline. Certification can take many months or more than a year, depending on the company's organization, said Roland Herwig, spokesman for the FAA's southwest region.
"I would say most often, it's probably a learning experience for the people who are starting the carrier," Herwig said. "Perhaps there are some things they haven't considered before starting."
Menconi, who is the former owner of a transportation consulting firm and once worked in management at TWA, Seaboard World and Pan American airlines, said he has been seeking investors to help finance the airline.
Menconi said he originally expected to spend about $7 million to get the air service up and running, but expenses ballooned to about $100 million when the company decided it would lease four planes instead of two.
"I've been cautious about how to do things. If I would have done things the way we had laid out in our original business plan, the way the market went, we would have been closed already," Menconi said.
With the entire airline industry experiencing a financial crisis and major carriers such as United Airlines filing for bankruptcy, Menconi admits these aren't the best of times to be getting into the business or looking for investors.
"To find a venture capitalist, you don't go in the Yellow Pages. You're out there practically begging. But all of a sudden now I've had a flood of calls and I'm having to practically turn people down," said Menconi.
Steve in New Orleans