More about Coleman Andrews
YORK – So (South African) Public Enterprises Minister Jeff Radebe tells us that the SAA board was utterly impotent and allowed CE
Coleman Andrews to turn the airline into a slot machine that dispensed nearly R600 million at his pleasure. That’s a mere R17.7 million a month or R580,000 a day from Andrews’ appointment to his resignation.
Great work. And apparently the slot machine didn’t even need to be fed anything. Just pull the lever. There are very few US airline CE
’s who could walk away with $30 million for less than three years work in an unlisted company.
Already comfortably off, It was in California that he saw an opportunity in World Airways. Just into his thirties, Andrews managed to take control and raise $100 million to recapitalise it and move it “home” to Virginia from Oakland. The Andrews’ family lived in a posh suburb of McLean, Virginia near CIA
headquarters. World Air has since moved to Peachtree, Georgia. Andrews had some aviation blood since his father served in World War II
as a junior navigator on B17 bombers flying out of Italy.
World Air came into being just after the War with a complement of three Boeing Clipper flying boats. It subsequently earned most of its revenue from contract airlifts for the US military, some of it described as “clandestine”. The firm’s most famous military work was done during the Gulf War for which Andrews received a commendation in 1993.
When Andrews and a selected management team stepped in, World Air was in serious trouble. It had commenced scheduled flights to supplement its “wet” leasing and contract work, but that failed leaving accumulated debts of more than $200m by 1986. In 1987 World Air became a wholly owned subsidiary of WorldCorp, which was really a cash shell that listed on the NYSE
[WOA]. In 1994 WorldCorp sold a 25% stake to Malaysian aviation company Naluri.
The new team plugged the leak and produced good profits, doing particularly well out of the Gulf War. By 1995 the company was doing well enough to be listed and in September 1995 it debuted on Nasdaq [NASD:WLDA] at $12 a share, falling to $1 before Andrews left in 1998.
However, by 1996 the company resumed scheduled flights and opened up routes to Tel Aviv and Johannesburg. Both are curious destinations for an airline with military connections. World Air president and CE
Charles Pollard, who was working in South Africa as the World Air representative, was canned by Andrews, then chairman of both companies, for the failure of the scheduled flights which nearly put the company out of business.
By June 1998 Worldcorp was in default on bonds worth $65 million, with loans made to World Air never repaid. With creditors threatening to liquidate the company, Andrews was pushed out according to a “change of control” notice filed with the Securities and Exchange Commission. WorldCorp was eventually forced into bankruptcy and its stock in World Air was distributed to creditors under court order.
WorldCorp no longer has any relationship with World Air, but Andrews' younger brother, A. Scott Andrews remains is still employed by World Air. He became a director in 1992.
Oddly, Andrews’ first SAA employment contract dates to May 1998, a month earlier than his official resignation from World Air. His departure was the result of “emergency restructuring” under which turnaround specialist Patrick Graham was appointed as replacement CE
. Graham was an employee of Bain & Co., the consulting company that received millions of dollars from SAA and which is linked to Bain Capital, which Andrews helped found.
Amusingly, a political publication says Andrews moved to South Africa to “manage the state run airline for President Nelson Mandela.” Gee, who knew the former prez was such a hands-on kind of guy and that he would call up Coleman for the job.
SEC filings show that Andrews never earned more than $350,000 a year as the boss of World Air. That stands as a contradiction to the insistence by (Transnet MD
Saki) Macozoma that Andrews’ South African base salary of $1 million a year was “competitive”.
While Andrews also had a complex incentive and bonus scheme with World Air, it wasn’t nearly as rewarding as the one he secured from SAA. Similarly, his handpicked lieutenants couldn’t have dreamed of earning the average $1.65 million each received had they stayed in the US.
Paragraphs selected from an article dated 15 June 2001. Full text at
Some more interesting info at http://www.suntimes.co.za/2002/07/14/lifestyle/life04.asp
After Monday and Tuesday even the calendar says WTF...