Financial head winds grow

Balloon: Even if the Baltimore balloon flies again, it likely will face weak revenue, rising insurance bills and perhaps lawsuits.

Balloon Accident Aftermath

July 21, 2004|By Meredith Cohn | Meredith Cohn,SUN STAFF

If the helium balloon ride in Baltimore survives official scrutiny into why 16 passengers spent nearly two terrifying hours stuck in the air Saturday, it still will face what could be a more daunting obstacle that other attractions have failed to overcome: not enough tourists.

The Baltimore balloon, already bailed out of financial distress once by the nonprofit Abell Foundation, has been struggling since its maiden voyage above the Port Discovery children's museum in July 2001.

And now the operation could face higher insurance premiums, if it remains insurable, and perhaps even lawsuits, experts said. That further puts in doubt the future of the balloon that tourism and balloon officials had hoped would become an icon for Baltimore.

"It has had 9,000 flights without incident," said Lee Raskin, the businessman and developer who invested his personal wealth and time in the venture but left at the end of last year when control shifted to the nonprofit Balloon Over Baltimore Inc.

But 9,000 rides, for groups of 15 to 25 people, have not been enough to overcome unforeseen delays and costs.

A train fire stalled its opening, the September 2001 terrorist attacks grounded it for more than a week and the Washington-area sniper shootings drove away riders. Insurance and taxes have been burdensome, sponsors have been elusive and then a snowstorm popped the balloon last winter.

If the balloon ultimately is deflated by money woes, it would not be alone. Those in the industry say financial difficulties have grounded at least two balloons in the United States, where the tethered helium balloons are still a relative rarity.

The Baltimore ride will remain grounded as state inspectors, who revoked the balloon's license after Saturday's accident, conduct a review expected to take a month.

The Abell Foundation, which provided funding for the balloon last year, referred calls to the balloon operators.

Alan M. Leberknight, board president of the nonprofit operating the balloon, could not be reached for comment, but he has said the board planned to evaluate the balloon's financial viability at this season's end. Now, it also has the accident to consider.

Raskin, who was saddened that his project hurt or even frightened riders, believes the balloon is safe and those other setbacks could be overcome if not for the location of its launching pad. The balloon has been ascending from several blocks off the tourist-rich Inner Harbor, which has meant ridership would never meet lofty expectations of 200,000 a year.

Safety has not been a big problem for balloons, despite the television images of terrified riders above Baltimore Saturday, according to balloon operators, regulators and other experts.

Eric Horton, a balloon pilot since 1978 and manager of Capt. Phogg's hot air balloons in Fenton, Mich., since 1990, noted that tethered helium balloon rides in Michigan and Las Vegas closed years ago because of lack of patronage.

"I would never tell customers there is 100 percent safety," Horton said. "But tethered balloons have been around since the 1700s, and ballooning is an extremely safe sport."

Operators of tethered helium balloons in Philadelphia and Niagara Falls, N.Y., say they have not had safety problems, and state inspectors concur.

There have been accidents overseas, however.

A fast-approaching storm in Germany, which killed 12 people around the country the same day, caused a helium balloon to break from its moorings at a fair in June 2003. A rope dangling from the balloon wrapped around the arm of a 5-year-old girl on the ground. The child was carried 40 miles before she fell to her death. Inspectors discovered operators had ignored storm warnings and failed to get a flight permit for the temporary balloon.

In a 1996 accident at a park in China, a Hong Kong teenager was killed when ropes anchoring a helium balloon gave way and the balloon floated skyward until it popped and dropped the girl to her death. The ride was removed.

In the United States, no single government agency tracks tethered balloons. The Federal Aviation Administration, which does not regularly inspect the balloons, must sign off on the operations and limits their ascent to 500 feet.

Considered amusement rides, the balloons are regulated by the states, which, like Maryland, typically require once-a-year inspections and proof of insurance.

Linwood Murray, vice president of public safety and risk management for the Philadelphia Zoo, which has operated the balloon there since June 2002, said the operation is profitable because riders consider it safe. And the zoo attracts more than a million visitors a year, he said.

Shaun Asbury, assistant general manager at the Great American Balloon Co. in Niagara Falls, said his balloon is in its fourth profitable season. The balloon moved from Las Vegas, where rent was higher and tourists were more inclined to stay inside in the air conditioning.

"Here, you come to see the area itself and the best place to see it is in the air," Asbury said.

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