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.

==========
**NOTICE:  In accordance with 17 U.S.C. Section 107, this material is
distributed without profit to those who have expressed a prior interest in
receiving the included information for research and educational purposes.**
==========