Valujet

Price wars erupt. Passengers drive two hours to nab a $49 fare. Business perks up for rental car companies, taxis and food stands.Sound familiar? No, it's not BWI. This time, it's Dulles.What Southwest Airlines did for BWI, an aggressive, little Atlanta-based carrier named ValuJet Airlines Inc. is doing for Washington Dulles International. And the North Virginia airport, better known for its long, domestic flights and international service, is quickly becoming a haven for shorter, low-cost flights, with BWI no longer the only discount game around.

The clock starts ticking the minute an AirTran Airways plane touches down at Baltimore-Washington International Airport. The low-fare airline's ground crew typically has 25 minutes to sweep the aisles, take on passengers, load luggage, fuel the plane and send it back down the runway for its next flight. If that means pilot Randy Smith has to help toss bags into the cargo hold, so be it. Airplanes make money only when they're flying, and there's no room here for rigid work rules among the airline's unions.

ATLANTA -- ValuJet Inc. and its top executives are named in a lawsuit by three shareholders who say the company issued false assurances that its planes were safe.The ValuJet shareholders, seeking class-action status, filed the lawsuit yesterday in U.S. District Court in Atlanta against the Atlanta-based airline, Chairman Robert Priddy, President Lewis Jordan, Vice Chairman Maurice Gallagher and Chief Financial Officer Stephen Nevin.ValuJet already is the subject of lawsuits from several families of the 110 passengers who were killed May 11 when a ValuJet plane crashed in the Florida Everglades, leaving no survivors.

In the months after ValuJet Flight 592 plunged into the Florida Everglades, wary travelers stampeded away from bargain airlines. ValuJet, once the darling of Wall Street, instantly saw its plane seats empty and its profits evaporate. Bookings also went limp at low-fare competitors, including Orlando, Fla.-based AirTran Airways, as passengers wondered if cheap fares came at too dangerous a cost. Some analysts questioned whether the carriers would survive safety worries. But five years after the disaster May 11, 1996, the industry landscape is drastically changed.

ATLANTA -- ValuJet Inc.'s two founding officers slashed their compensation in 1996, a year in which the discount airline was grounded after the crash of Flight 592.ValuJet Inc. Chairman Robert L. Priddy and Lewis H. Jordan, chairman of the holding company's airline unit, each got $135,781 in salary for the year, down from $150,000 in 1995. And Priddy and Jordan did not receive bonuses or stock options for 1996.In 1995, Priddy and Jordan received bonuses of $250,000, as well as options for 290,000 shares of stock.

ATLANTA -- ValuJet Inc.'s senior management said yesterday that the company is recovering after the crash of one of its planes, but probably won't return to its full schedule until at least year-end.The no-frills airline, which has halved the number of its daily flights to 160 from 320, said it may have to cut more flights and won't resume the suspended ones for at least several weeks. ValuJet may delay delivery of its six new jetliners as well."We have stabilized our situation," said Robert Priddy, ValuJet chairman and co-founder, in a conference call with investors.

ATLANTA -- ValuJet Inc. said yesterday that it may fire some employees as a result of increasing expenses in the wake of the crash of one of its planes, but said it would consider voluntary leaves of absence first."

ATLANTA -- ValuJet Inc. said its planes flew almost half-empty last month as passenger traffic dropped sharply after one of its planes crashed in the Everglades, killing 110 people.The low-fare, no-frills airline said its load factor -- the percentage of seats sold -- was 52.7 percent in May, compared with 71.5 percent in May 1995. In April, ValuJet's load factor was 61.8 percent."Near-term traffic is terrible," said Samuel Buttrick, an analyst at PaineWebber."The recovery process, the traffic rebuilding, will be slow and arduous."

ATLANTA -- ValuJet Inc. said yesterday that it expects to resume operations in three weeks, flying only five routes, a fraction of the low-fare airline's service to 31 cities before federal regulators grounded its planes.ValuJet also reported a 41 percent decrease in second-quarter profit before a $19.6 million charge tied to the Everglades crash May 11 and subsequent shutdown of the airline by the Federal Aviation Administration, which must approve ValuJet's plan to resume service.With the charge, the Atlanta-based airline had a bottom-line loss of $9.6 million, or 18 cents a share, or 50 percent worse than the average loss of 12 cents a share forecast by eight analysts polled by Zacks Investment Research.

ATLANTA -- ValuJet Inc. said it was unprofitable in the fourth quarter and for the year as costs related to a three-month grounding hurt its operations and cash level.The discount airline's quarterly loss from operations was $12.3 million, or 22 cents a share, compared with net income of $19.2 million, or 32 cents a share, a year earlier.ValuJet took an $8.3 million charge for costs of the June-September shutdown, which federal authorities ordered after a fatal crash in May. The charge made a final loss of $20.6 million, or 38 cents a share.

WASHINGTON -- The aviation maintenance company that delivered oxygen canisters believed to be responsible for the 1996 ValuJet crash, in which all 110 people aboard were killed, was charged with murder and manslaughter yesterday, and the company, a vice president and two mechanics were charged with carelessly handling deadly materials. Aviation experts say these were the first criminal charges brought in an airliner accident in the United States. Federal safety investigators said the maintenance company, SabreTech, improperly packed and labeled old equipment called oxygen generators from two other ValuJet planes and delivered them to the flight, causing a fire in a cargo hold that might have broken out even before takeoff.

ATLANTA -- ValuJet Inc.'s two founding officers slashed their compensation in 1996, a year in which the discount airline was grounded after the crash of Flight 592.ValuJet Inc. Chairman Robert L. Priddy and Lewis H. Jordan, chairman of the holding company's airline unit, each got $135,781 in salary for the year, down from $150,000 in 1995. And Priddy and Jordan did not receive bonuses or stock options for 1996.In 1995, Priddy and Jordan received bonuses of $250,000, as well as options for 290,000 shares of stock.

ATLANTA -- ValuJet Inc. said it was unprofitable in the fourth quarter and for the year as costs related to a three-month grounding hurt its operations and cash level.The discount airline's quarterly loss from operations was $12.3 million, or 22 cents a share, compared with net income of $19.2 million, or 32 cents a share, a year earlier.ValuJet took an $8.3 million charge for costs of the June-September shutdown, which federal authorities ordered after a fatal crash in May. The charge made a final loss of $20.6 million, or 38 cents a share.

The husband of a Baltimore woman who was killed when ValuJet Flight 592 crashed in the Florida Everglades in May has filed suit against the airline and its maintenance company in U.S. District Court, asking for unspecified damages.In a suit filed Wednesday, Gary Stroud accused ValuJet and Sabretech Inc., a contractor that maintained ValuJet's planes, of wrongful death and negligence in the May 11 crash, which killed all 104 passengers and five crew members aboard.Stroud, 35, married Brown in October 1995.

Susan Smith says she knows there are people who might not understand why she wants to hear the tape of the final terrifying minutes of the ValuJet flight that caught fire and crashed in the Everglades in May, killing all 110 on board, including her 24-year-old son, Jay.According to a transcript of the tape, which has been released, the passengers were screaming that the plane was on fire."

MIAMI -- The fire that brought down ValuJet Flight 592 may have reached 3,000 degrees Fahrenheit, hot enough to burn stainless steel, according to a National Transportation Safety Board expert who showed a videotape yesterday of a roaring, white-hot fire fed by oxygen generators of the kind the DC-9 was carrying.For years, the Federal Aviation Administration has contended that cargo holds of the kind where the fire occurred are safe because they are airtight and would smother a fire. But the holds are made mostly of aluminum, which melts and even burns at temperatures far below 3,000 degrees.

WASHINGTON -- The Federal Aviation Administration shut down ValuJet indefinitely last night, saying an intense evaluation begun after one of the airline's planes crashed in the Everglades on May 11 had turned up "serious deficiencies" in its operations.David R. Hinson, the FAA's administrator, said at a brief news conference that ValuJet had failed to establish the "airworthiness" of some of its aircraft and that "multiple shortcomings" had been found in its supervision of maintenance contractors.

MIAMI -- Passengers' terrified shouts of "Fire! Fire! Fire!" echoed from the smoke-filled cabin as flames spread rapidly through a ValuJet airliner over the Florida Everglades in May, transcripts of cockpit recordings revealed yesterday."

WASHINGTON -- Top executives of Valujet Airlines and Sabretech, the two companies that blame each other for the crash of a Valujet DC-9 in the Everglades in May, will testify this week at hearings by the National Transportation Safety Board that are expected to be far more confrontational than most plane crash inquiries.The hearings, which are to begin in Miami today and are expected to run all week, will closely examine two segments of the aviation industry -- start-up airlines such as Valujet and outside maintenance contractors like Sabretech -- those involved say.They are also intended to shed light on problems in the Federal Aviation Administration.