The Trenton Times
09/14/01

Shuttle America's fate uncertain

By LARRY HANOVER
Staff Writer

EWING -- Two weeks ago, Shuttle America officials were ebullient about their
airline's prospects, announcing that a Connecticut investment firm had been
found that would lead Trenton Mercer Airport's only commercial carrier out
of Chapter 11 bankruptcy.

Yesterday, however, the nation's uncertainty about air travel in the wake of
Tuesday's terrorist attacks left company spokesman Mark Cestari unable to
guarantee the 3-year-old airline's survival.

Shuttle America, which is temporarily down to one leased turboprop,
attempted unsuccessfully to resume service yesterday.

At 3:30 p.m., the airline sent the empty aircraft from Trenton Mercer to
Hanscom Field in suburban Boston to fly some 40 passengers back to Ewing.
But either the Federal Aviation Administration or the Massachusetts Port
Authority refused to clear Hanscom for the flight, said Trenton Mercer
Airport Manager Justin Edwards, pushing the resumption of service back at
least one more day.

Cestari offered high praise for Trenton Mercer officials' ability to quickly
meet FAA security standards for reopening to passenger flights. That swift
action could prove critical to the airline's long-term survival, Cestari
said.

"Every day out of business had dire financial consequences," Cestari said.

One airline already has closed as a result of the blow dealt the airline
industry by the attacks on the World Trade Center and the Pentagon.

Midway Airlines, which cut half its staff and dropped nine markets recently
due to the economic downturn, shut down Wednesday, saying it could not
weather the industry's grim new climate.

Several analysts have said in recent weeks that the major airlines could
lose $2.5 billion this year. Ray Neidl, an analyst with ABN Amro, said he
now believes the losses could approach the record $4.5 billion loss of 1992.

"It's unlikely that Midway will be the only airline to cease operations in
this environment," Sam Buttrick, an analyst with UBS Warburg.

Shuttle America is well-positioned for survival, Cestari said, but there can
be no guarantees.

"Well, obviously everyone is taking a deep breath to see what impact the
state of war will have on the markets and business travel," Cestari said.

"We believe that because we're a low-cost carrier offering very high value
that we may fare better than a high-cost carrier like Midway," he said. "We
will see. I don't know that anyone knows for sure."

Without announcing it, Shuttle America temporarily cut its fleet from three
leased planes to one. It has only three daily flights from Trenton Mercer to
Hanscom for the moment, with no connecting service to Buffalo, N.Y.

On Monday, the airline will have three planes again, meaning it can resume
connections with Buffalo as well as its seven daily departures out of
Trenton Mercer, Cestari said.

Some Shuttle America travelers were stranded by Tuesday's shutdown of air
traffic. Passengers generally made their own arrangements to reach their
destinations or find hotel rooms, Cestari said.

Shuttle America's reorganization plan calls for Wexford Capital LLC of
Connecticut to buy the airline and invest millions to bring the company out
of debt.

Edwards said Mercer County has confidence in Shuttle America and remains
hopeful.

"The Wexford group seems like it knows what it's doing," Edwards said.
"Nothing is good (in the industry), but we hope and hope they make it."

Wexford is known for owning and managing Chautauqua Airlines. Chautauqua
provides regional jets for affiliates of American Airlines, US Airways and
America West Airlines.

With no other airline actively seeking to serve Trenton Mercer, Shuttle
America's presence is critical to Mercer County Executive Robert D.
Prunetti's plans to build a new $18 million, 45,000-square-foot terminal.

The Associated Press contributed to this report.

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