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Start-up Update: AccessAir,Ozark,Heartland

Wed Feb 21, 2001 7:31 am

AccessAir Taps Ozark for Regional Jet Needs

Des Moines, Iowa-based AccessAir and Columbia,
Mo.-based Ozark Air signed a deal last week that
effectively merges their operations. The move was a
matter of survival for both carriers, for different
AccessAir, which emerged from Chapter 11-bankruptcy
protection in November 2000, was designed to counter
the higher fares of major carriers out of Des Moines.
The carrier, which began flying Feb. 3, 1999, was
grounded by November 1999 after lessors took back the
A new team, headed by lead investor John Ruan
III, pulled the carrier out of Chapter 11 and began
flying again in November 2000 with seven daily flights
to Chicago Midway Airport and managed to ink a deal
with American Trans Air [AMTR]. However, anemic loads
on its two Boeing [BA] 737-200, leased by
Missouri-based JODA Partnership have plagued the
carrier. The carrier acknowledged as much earlier this
month when it noted that loads went from 124
passengers a week to only 151 passengers a week
January on its 117-seat 737s.
Two things drove AccessAir into the arms of
Ozark. One, it would have been almost impossible for
the carrier to secure the 30- to 50-seat regional jets
it was seeking on its own, due to having already been
in Chapter 11. Two, RJ backlogs for Bombardier
[BBa.TO] and Embraer [ERJ] are so full, those
manufacturers are working hard just to fill orders for
their more-established customers.
Ozark, which started flying out of Columbia,
Mo., in February 2000 with two Fairchild Dornier
328JETs, has slowly built up its loads, with flights
to Chicago Midway, Dallas-Fort Worth, and Joplin, Mo.
The carrier has an interline agreement with
American Airlines [AMR] to Dallas-Fort Worth and
continues to negotiate with the major carrier for a
codesharing deal, says President and CEO John Ellis.
“We’ve signed a letter of intent for seven
more 328JETs through January 2002. We’re happy
with the Fairchild aircraft, but we might look at
other options,” he says.
The cities currently being served at Ozark are not
firm, says Ellis. “We’re looking at our
program differently than from a year ago. We’ll
serve the same cities, but the Chicago structure will
be modified, as we will no longer fly directly between
Midway and Columbia. We’ll now fly through Des
Moines.” Ozark will operate its 328JETs on a
wetlease with AccessAir, he adds, noting the aircraft
will keep their current livery.
So it’s a match made in heaven that may help to
ensure the survival for both start-up carriers. Under
the AccessAir wetlease, Ozark will operate four round
trip flights between Des Moines and Chicago starting
Feb. 22. Scheduled flights to DFW and its charter
services from DFW to Taos, New Mexico won’t be
affected by the Access Air agreement. >>AccessAir,
515/453-2058; Ozark, 573/449-6520; JODA,
314/275-4011<< – Benét J. Wilson

Heartland Airlines Grounded by Funding Woes

Dayton, Ohio-based startup Heartland Airlines has
shelved plans to serve the region after a last-minute
effort to secure a loan from the Ohio state
legislature fell through last week. State Rep. Jon
Husted (R) tried to push through emergency bill to
loan the carrier $10 million, but to no avail. The
carrier, in turn, has laid off its entire staff. Calls
to Heartland went unanswered last week.
Husted – who spearheaded the effort to obtain
the loan – tells C/R News that the startup was
fast approaching a fundraising deadline. “As a
result, they were going to have to cease operations if
they didn’t get a commitment for capital before
last week’s deadline,” he explains.
“Heartland was unable to pay staff with its
initial funding.
The roller coaster behavior of the stock market
didn’t help, says Husted. “Because we are
in a time where people have taken a lot of paper
losses in their portfolios, it’s become much
harder to find investors,” he states.
“Heartland was hoping to pursue a temporary loan
that would give them additional opportunities to raise
more private dollars, but they weren’t able to
accomplish that.”
Heartland only had a short period of time to get money
from the state legislature, says Husted.
“It’s very hard to get loans from the
legislature for non-capital activities,” he
said. “But there was a strong belief that that
Dayton would be able to support Heartland. We ran the
numbers through an airline planning company and it
found that Heartland could have been a profitable
regional carrier. I hope they can get their money, but
they have temporarily suspended staff
Heartland planned to start operations with six Boeing
[BA] 717s re-establish Dayton as a hub, as it was
during the days the old Piedmont Airlines was flying.
Upon its acquisition of Piedmont, US Airways [U]
dismantled the hub and focused on the East Coast.
Dayton has no direct competition from the major
airlines, but offers a mix of jet and turboprop
flights. The carrier also planned to feed the Dayton
hub with six Jetstream J31 or similar aircraft.
In its Department of Transportation filing, the
carrier described itself as providing Midwest Express
[MEH]-type service with executives that had a
Southwest [LUV]-style of management. The effort looked
good on paper. Heartland tapped former Piedmont
Airlines chairman, president and CEO Bill Howard in a
similar position. Howard came out of retirement in
1993 to lead TWA [TWA] out of bankruptcy, and he left
in 1995.
Dennis Crabtree left a senior vice president position
at Midwest Express to serve as Heartland’s COO.
Crabtree also served as president of Continental
Express [CAL], where he was replaced by current Mesa
[MESA] Chairman Jonathan Ornstein in 1994. Tapped as
CFO was Roland Breunig, who had a similar position at
Midwest Express. 
Posts: 2115
Joined: Wed Dec 22, 1999 7:38 am

RE: Start-up Update: AccessAir,Ozark,Heartland

Wed Feb 21, 2001 8:02 am

Does this mean it's the end for Heartland?
Posts: 2955
Joined: Mon Jun 26, 2000 5:56 am

RE: Start-up Update: AccessAir,Ozark,Heartland

Sat Feb 24, 2001 12:01 am


Great article. In today's Des Moines Register, there's another article:
It doesn't say much except for that there will be a delay in switching to the new equipment.

But, I also noticed that ZA updated their website, On this website there is more info in the form of news releases and schedules. These weren't there on the previous version of the site. You may have to scroll down a bit to catch the news link on the bottom right. ZA is offering Columbia, MO as a destination although the schedule is limited. Also, on ZA's website there is a 728JET-family aircraft pictured on all the pages after the intro page. Hmmmmm...... One of the news releases on the ZA site said that DSM/CID-PHL was a priority and that they were hoping to add 4-5 RJs by the end of the year! Interesting stuff. Lots of room for speculation now.

In these days of Big Air, I hope Ozark and ZA the best.


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