Trenton (NJ) Times
3/24/01
Shuttle America
fails to pay county rent
By NICK MANETTO
Staff Writer
TRENTON
-- One month ago, Shuttle America's chief executive celebrated the
company's
second anniversary of flying to the area with talk of adding
destinations and
buying more aircraft.
Now, the airline is behind with rent payments to
the county.
Shuttle America, the only commercial carrier operating out of
Trenton Mercer
Airport in Ewing, owes the county about $145,000 in back rent,
county
officials said.
The Connecticut-based carrier has also reduced
its flights to and from the
airport.
Shuttle America said the cash
flow problems are temporary and caused by
rising fuel prices and a slow
winter travel season.
"We have an arrangement worked out with the
airport, which we are living up
to," said Mark Cestari, a Shuttle America
vice president and spokesman.
"Trenton continues to be our largest and most
successful market and there
are no plans to do anything but continue to grow
there over the long haul."
Shuttle America owes the county $144,796 in
back rent, county spokesman Tom
Rubino said. The company paid the county
$24,000 in February and $12,000
this month, he said.
Rubino said the
overdue rent dates back a couple of months, but he didn't
know when the
payments began to accrue. He said the airline owes the county
$4,000 a month
for office space and the rest of the payment fluctuates
depending on
passengers.
Last year, Shuttle America entered into a three-year lease
with the county
that was expected to net it $282,000 annually because of the
expanded flight
schedule.
Rubino said the county collected $18,000 in
tax revenue from a $3 ticket tax
approved by the freeholder board late last
year.
"We have every confidence they will make up the payment as their
cash flow
improves," Rubino said. "We understand cash flow problems, but
we're
confident they'll make that up."
Mike Boyd, a consultant with
the Boyd Group, an aviation consulting firm,
said airlines are routinely late
with rent payments and Shuttle America's
situation shouldn't be an indication
of financial problems.
Boyd said perception of financial duress is "like
telling the public don't
fly these people."
Cestari said the company
will offer fewer flights to the county until May
because it's negotiating to
purchase its aircraft through a different
leasing agent, but he said the
airline hasn't dropped any destinations.
Shuttle America flies from Ewing
to Greensboro, N.C., Buffalo, N.Y., and
Hanscom Field in suburban Boston. The
airline also flies to Hartford, Conn.,
and New York's LaGuardia
Airport.
Richard Walsh, a spokesman for the Massachusetts Port Authority,
which
operates Hanscom Field, said Shuttle America is up to date with its
payments
there.
In mid-February, company Chief Executive Officer David
Hackett said Shuttle
America was considering adding flights to several
cities, including
Washington, Richmond, Va., Pittsburgh and Cleveland and
hoped to add either
two or three new planes to its fleet of
six.
Yesterday, Cestari said fewer flights are being offered because one
of the
company's planes is undergoing heavy maintenance and is out of
service. He
said the company planned to have replacement planes available to
cover those
being repaired, but was unable to do so.
He said the
airline is continuing to grow, especially with its flights to
Boston and
Greensboro. Once more planes become available, the company will
probably
replace the services cut and look at adding new routes, he said.
He
predicted more than 200,000 passengers would fly Shuttle America from
Trenton
Mercer Airport this year.
In January, 6,218 passengers flew Shuttle
America out of Trenton Mercer, up
from 2,220 the year before, according to
county statistics. The airline
carried 6,550 passengers in February, up from
3,355 in February 2000.
Shuttle America flew 278 flights out of the
airport in February, down from
353 in
January.
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