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ValuJet tries to put past behind it at shareholders meeting

May 21, 1997

ATLANTA (AP) _ ValuJet Airlines’ shareholders wanted to know Wednesday what the discount airline has done to bring back customers and again make money following last year’s crash in the Florida Everglades.

ValuJet chairman Lewis Jordan told about 200 shareholders at the carrier’s annual meeting that the Atlanta-based airline lost $41 million in 1996 and $18 million in the first six months this year.

``There are 20 companies in Atlanta who won’t allow their employees to fly ValuJet because they say it is unsafe. It’s time for you to roll up your sleeves, get out there and do the hard work,″ said Richard Schwamb, who owns $500,000 in ValuJet stock and oversees a consortium of 20 shareholders.

Neither Jordan nor Robert L. Priddy, head of the airline’s holding company, would say when the airline will return to profitability. Spokesman Gregg Kenyon said executives expect ValuJet to see a profit next quarter, when summer travelers will be flying.

The airline has been operating at a loss, using a $250 million surplus it had before the crash to stay airborne.

The meeting came 10 days after the one-year anniversary of the May 11, 1996 crash of ValuJet Flight 592 that killed all 110 people on board.

ValuJet was subject to an intense safety review by the FAA after the crash, and the FAA grounded the airline for more than three months. It resumed flying Sept. 30, but has received permission to use only about half its 51 planes for passenger service.

The airline also saw its stock price drop 60 percent, from $17.88 the day before the crash to $6.87 1/2 a share at Wednesday’s closing.

ValuJet officials Wednesday said they wanted to focus on the carrier’s future.

``We don’t want to talk about the crash anymore,″ Priddy said. ``We want to talk about the new ValuJet.″

The annual meeting’s scheduled 15-minute open discussion was extended to more than an hour. Some shareholders suggested ValuJet promote its scrutiny by federal inspectors to its advantage, playing it up in advertisements to convince customers the airline is safe.

Others suggested including charters, cargo service and a frequent-flyer program to help boost business.

``One of the ways we keep low fares is not by cutting corners, but keeping it very simple,″ Priddy replied, adding the airline will not turn to cargo service.

He outlined several other profit-making methods the airline plans to use.

In June, ValuJet will offer reservations through the Computer Reservation Service, making it easier for travel agents to access the airline, Priddy said.

And by July, the airline should have an additional five planes approved by the FAA for daily service.

Many shareholders applauded the way the board handled the tragic crash and its return to the air.

Myron Kaufman, who purchased his 200 shares of stock after the crash, said he did so because he believes ValuJet has a future.

``I thought there was a good chance the company would survive because they had a substantial cash reserve,″ he said. ``And I think there’s a need for low-cost airlines.″

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