PORT AUTHORITY Airline asks for a line of credit

Golden Airways says it could be flying in 60 days.
By STEPHEN SIFF
VINDICATOR TRUMBULL STAFF
VIENNA -- The founder of Golden Airways has asked Western Reserve Port Authority if it could provide a $25 million line of credit to get his startup company off the ground.
Lee Allen, CEO of the Colorado-based company, suggested the board could mortgage part of Youngstown-Warren Regional Airport to secure money to lend his company.
This type of arrangement could leave the airport saddled with debt and facing foreclosure if the airline fails.
"They talked about going for a $25 million line of credit and asked if there is any way the port authority could assist with that," said Reid Dulberger, chairman of the authority, which runs the airport.
"We simply told them we needed more information about Golden Airways," he said. "Who they are, their finances, for example, before we had that discussion."
Golden's plans
Allen announced last week that Golden Airways wants to rent the entire airport terminal and create a "mini-hub" in Vienna, with flights to 10 East Coast destinations.
His plan would create 150 jobs immediately and pump $48 million a year into the local economy, he said.
He also said the company would do it without any government handouts. "We haven't asked for anything from anybody," he said Wednesday.
If plans progress smoothly, the new airline could have five planes in the air in 60 days and 10 more in a year, he said.
Allen did not return messages left at his hotel room or with associates.
"When and if we have anything to release, we will call a press meeting and issue a proper press release," said Nancy Copeland, who has been traveling with Allen and assisting him with the project.
So far, several announcements about Golden Airways' plans have come through Don Manning, the Republican candidate for Trumbull County commissioner, who said he met Allen through local party officials.
Use of money
Manning said he only recently learned about the company's request for a $25 million line of credit.
"The way I understand it, they don't want to use the money," Manning said. The line of credit is just to assure the airline that the airport is on board with Golden Airways.
"They just don't want the airport to take their plan and use it against them," Manning said.
Other officials say they were under the impression that the line of credit would be used for the costs of starting an airline.
"Their needs are strictly working capital," said Julie Michael, the governor's regional representative for economic development.
She said she told Allen at a meeting several weeks ago that, in general, the state can provide money for infrastructure improvements, but not for the costs of running a business.
Golden Airways does not own or lease any airplanes or have a certificate from the FAA to fly them.
The company's proposal is one of several the port authority has received from people who have interesting ideas, but an unproved ability to achieve them, Dulberger said.
"We continue to look, we continue to meet with them," he said. "If he pulls it off, it would be great for the community."
Information request
The port authority is waiting for information requested two weeks ago detailing Golden Airways' financial plan, board of directors and prospectus, Dulberger said.
All that has been provided so far is a form for purchasing stock, he said.
Before founding Golden Airways, Allen was vice president and general manager of Excalibur Aviation, a charter company operating primarily in North Dakota.
The company was grounded by the FAA in 1996 after inspectors found the company used unqualified pilots and unauthorized aircraft and violated the terms of its operating license.
siff@vindy.com