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Return of Flight Certificate Big Step Toward ValuJet Restart

August 30, 1996

ATLANTA (AP) _ ValuJet took a giant step closer to flying again as federal regulators returned its operating license, giving the carrier hope that it would soon be back in business.

The Federal Aviation Administration returned ValuJet’s operating certificate Thursday, two months after the airline was grounded following the crash of one its planes in the Florida Everglades, killing all 110 people aboard.

Also Thursday, the parent Transportation Department said it had completed a review of the airline’s financial and management fitness and concluded that ValuJet was ready to resume operations.

In early trading today after the news, ValuJet stock jumped 11 percent, or $1.25, to $12.25 a share on the Nasdaq Stock Market.

The Transportation Department’s ruling remains open for seven days during which interested parties can file objections. If none are filed within that period, the department could approve resumption of flights immediately, said John V. Coleman, director of the DOT’s office of aviation analysis.

``We have a lot of hard work left to get done,″ said ValuJet president Lewis Jordan. ``We believe that it will be very soon that we will be flying again.

``I’m very optimistic,″ he said.

ValuJet executives and employees cheered the good news, embracing each other and raising their fists in triumph. Jordan, who hoisted the operating certificate above his head for the crowd to see, was interrupted several times by roars of approval from the workers, most of whom have been furloughed for more than two months.

``I am very excited. We’ve been waiting on this,″ said Marlene Cottle, who works in the ValuJet reservations department. ``My heart is at ValuJet.″

But it was still unclear how much longer ValuJet would remain grounded, with some opposition threatening its return.

The Association of Flight Attendants, which has sought to oust top ValuJet officials, said it ``definitely″ would file an objection.

``We think there’s a cover-up here. We think the FAA doesn’t want a hearing because it will expose just how much the FAA and DOT knew about safety problems at ValuJet long before the May 11 crash,″ said David Borer, the union’s general counsel.

If objections are filed, the airline would have four days to reply, Coleman said. The DOT then could go ahead and allow ValuJet to fly or seek more information.

ValuJet was grounded because of concerns over its maintenance procedures, which had been under scrutiny by regulators even before the Everglades crash.

The May 11 Florida crash is thought to have been caused by a fire originating in a cargo of chemical oxygen generators. ValuJet was not authorized to carry the generators and blamed a subcontractor for mislabeling them as empty.

The airline, which rode cheap fares and an informal atmosphere to sensational growth in less than two years, has undergone an extensive safety investigation during the time it was grounded.

The FAA said it had required ValuJet to revise its organizational structure, to add additional maintenance and management personnel, and to recheck all pilots, instructors and airmen.

Increased scrutiny would remain after ValuJet resumed service.

ValuJet would be supervised by seven full-time FAA inspectors, up from three before the grounding. Any expansion in service will require approval.

``From the standpoint of running the airline, where we were unconstrained by DOT or FAA in our ability to grow ... they made it clear they want us to work with them on our rate of growth,″ Jordan said.

``But beyond that, we are going to be the same fun and friendly ValuJet Airlines,″ he said.

Under the FAA ruling ValuJet would return to service with nine aircraft and be allowed to add six more over the following few days. That’s down from 51 it was using when it was grounded.

All 15 ValuJet aircraft would be the same type of McDonnell Douglas DC-9. When it was grounded the airline was using 11 different configurations of the DC-9.

ValuJet, which furloughed most of its 4,000 employees after being grounded, will bring back workers in proportion to its level of operation, Jordan said.

ValuJet would initially serve Atlanta and four other cities, which Jordan would not identify. The FAA said it could serve up to 18 cities, compared with 26 before the crash.

Jordan said he was confident passengers would return to the airline, but analysts had mixed opinions.

``I don’t think they (consumers) ever lost much confidence,″ said airline industry analyst Morton Beyer of McLean, Va. who noted that TWA didn’t lose business after its Flight 800 exploded off Long Island, N.Y., on July 17, killing 230 people.

But Mike Boyd, president of the consulting firm Aviation Systems Research Corp. of Golden, Colo., said ValuJet’s name may be permanently damaged.

``Every time you turned on the television, you saw some news person talking about the airline with the logo and that stupid little critter thing behind them,″ Boyd said, referring to the mascot featured in ValuJet’s advertising.

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