Legal turbulence batters airline that intends to serve the Valley
A month ago, we, along with many Mahoning Valley residents who believe that regular commercial airline service is necessary for our economic viability, hailed the decision by Aerodynamics Inc. of Beachwood, Ohio, and Atlanta to provide daily flights to and from the Youngstown-Warren Regional Airport.
Indeed, an application to provide service to Chicago is pending before the U.S. Department of Transportation.
In an editorial published Oct. 17, we urged federal regulators to act quickly in approving ADI’s application so the regional airline could kick-start its service during the Thanksgiving holiday, one of the busiest seasons of the year in airline travel.
But today, in light of the front-page story in Sunday’s Vindicator, we believe that caution is advised — not only on the part of the federal government, but the Western Reserve Port Authority, which oversees the airport and the adjacent facilities.
The Sunday story by Reporter Ed Runyan is steeped in details about ADI and its chief excutive officer, Scott A. Beale.
Beale has been ordered by a federal jury in Virginia to pay $600,000 after it found that he had fraudulently made a statement to induce a business partner at the time, James Paquette, to invest $500,000 in Aerodynamics Inc.
Paquette is president of Flight Test Aviation Inc. of Chantilly, Va.
Beale has filed for Chapter 7 bankruptcy protection in Ohio.
Regardless of the explanations from ADI’s chief, the legal turbulence does give pause.
The Mahoning Valley, in general, and the port authority, in particular, aren’t mere observers in this tale of woe. In order to lure the regional airline, the authority is guaranteeing revenue of $1.2 million (public funds) so the company can show a profit in the start-up phase of service.
In addition, the authority is committing an additional $130,000 to ADI before service begins.
By providing the revenue guarantee, the port authority expects the airline to make a 5 percent profit in the initial phase, until the service is self-sustaining.
GAME-CHANGER
Dan Dickten, director of aviation for the Youngstown-Warren airport, is obviously aware that The Vindicator’s story about Beale’s legal troubles could be a game-changer if Valley residents begin to lose faith in the deal that has been struck.
He, thus, is attempting to highlight the difference between Beale’s being found guilty of overselling the business deal to his former partner and the commitments Beale has made to the authority.
Dickten says he does not believe Beale is guilty of overselling what his company can do for this area.
Indeed, the start date for the service has been moved from Thanksgiving to the spring because the airline’s CEO wanted to give the airport time to market the service and sell tickets, Dickten noted.
ADI has money tied up in aircraft and would have preferred to start right after U.S. Department of Transportation approval, the airport manager added.
Ron Klingle, port authority chairman, also does not see a connection between Beale’s legal troubles and the proposed service to Chicago.
“ADI has the ability and desire to provide this service. If or when this service begins, there will only be one reason why it succeeds or fails — whether the people in our community use the service or not.
“It has nothing to do with Scott Beale’s past. It has everything to do with whether or not major companies in our area make the decision to help support and promote this service.”
We have long advocated regular commercial airline service and have urged the director of aviation and the port authority to reach out to the major carriers.
Earlier this year, United Airlines had explored the possibility of serving this region, but nothing came of it.
Given the $1.33 million the port authority is putting up to lure ADI, the following question looms large: Are Dickten and the authority confident that Beale can deliver?