Concord airline grounded by bankruptcy
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Concord airline grounded by bankruptcy
Just received the following sad news:
West Coast Airlines flew high with dreams of connecting several Northern California cities with Las Vegas, Reno and San Diego.
But after raising more than $1 million in financing, the Concord-based carrier has crashed into bankruptcy court with less than $300 remaining in its coffers.
While the Sept. 11 terrorist attacks played a role in West Coast's failure to gain altitude, said president and CEO Ray Sherwood, the company never secured an airport from which to fly and it never acquired or leased a plane.
Furthermore, the company claims its former chairman received $125,000 in improper commissions over the past two years.
West Coast filed for bankruptcy Dec. 7 with $175 in a checking account, $80 in savings and $10 cash on hand.
"I have yet to find anyone who will tell me this was a bad idea. It just takes a heck of a lot of money to start up," said Sherwood, a Pleasant Hill resident who's worked over the past 35 years as an airplane pilot and in airline management. "There was nothing coming in and everything going out."
West Coast, which took its name from a passenger carrier that merged with two other airlines in 1968, raised $1.02 million over three years. That amount was described by Sherwood as seed money toward funding of $12 million to $25 million. Sherwood says he invested close to $25,000 himself last year.
"Almost all of my savings was put into this, and about five years of hard work," Sherwood said.
The Federal Aviation Administration demanded that the company raise at least $6 million before it could buy the first of four BAe-146 jets -- each with 108 seats -- and receive certification.
Stuck on the runway: West Coast, which also did business as West States Express, presented plans in mid-2000 to fly from Livermore Municipal Airport and Concord's Buchanan Field. But local residents opposed both plans.
As late as last March, West Coast officials said they planned to fly four DC-9 aircraft between Reno/Tahoe International Airport and San Jose, Stockton, Long Beach, San Diego, Las Vegas, Portland, Seattle and Denver.
"We haven't heard a thing from them (since)," said Adam Mayberry, spokesman for the Airport Authority of Washoe County, Nevada.
But there may be more to West Coast's problems than an inability to raise funds during a tough economy.
Commission suspicion: The airline claimed $125,000 in losses for improper commissions paid to former Chairman Alan Painter, according to the company's filing with the U.S. Bankruptcy Court in Oakland. It isn't clear in the court filing why West Coast opposed the commissions or why Painter was paid the money in the first place, but Sherwood said earlier this month that Painter was supposed to introduce "financial people" to the company.
Painter, who also sued West Coast in Orange County Superior Court, left the company in January 2001. Helen Painter, the airline's vice president, also left the firm.
Neither Painter nor his attorney in the Orange County action, David Kahn, could be reached for comment.
Painter, according to Sherwood, was introduced to West Coast's organizers as "an aviation expert with a lot of money." Sherwood said Painter claimed to be a former principal of the old West Coast Airlines.
Skeptical, Sherwood said he asked for five references and received confirmation from three. Later, Painter suggested a stock offering by the company, Sherwood said, and West Coast's attorneys suggested all of the principals fill out an application. Only the Painters refused, Sherwood said.
"I said, `You either sign or you resign,'" Sherwood recalled.
"(Painter) and the company don't get along," said Michael Primus, a Walnut Creek attorney representing West Coast in bankruptcy court.
Still, Sherwood isn't giving up. He hopes to someday launch an airline, modeled after Southwest Airlines and flying to small communities that aren't served by larger airlines.
"When you find someone really interested in promoting air travel, it's really a passion for them," he said.
Source <a href="http://members.brabant.chello.nl/~j.vanderschaar00/news.htm" target="_blank">Aviation News</a>
West Coast Airlines flew high with dreams of connecting several Northern California cities with Las Vegas, Reno and San Diego.
But after raising more than $1 million in financing, the Concord-based carrier has crashed into bankruptcy court with less than $300 remaining in its coffers.
While the Sept. 11 terrorist attacks played a role in West Coast's failure to gain altitude, said president and CEO Ray Sherwood, the company never secured an airport from which to fly and it never acquired or leased a plane.
Furthermore, the company claims its former chairman received $125,000 in improper commissions over the past two years.
West Coast filed for bankruptcy Dec. 7 with $175 in a checking account, $80 in savings and $10 cash on hand.
"I have yet to find anyone who will tell me this was a bad idea. It just takes a heck of a lot of money to start up," said Sherwood, a Pleasant Hill resident who's worked over the past 35 years as an airplane pilot and in airline management. "There was nothing coming in and everything going out."
West Coast, which took its name from a passenger carrier that merged with two other airlines in 1968, raised $1.02 million over three years. That amount was described by Sherwood as seed money toward funding of $12 million to $25 million. Sherwood says he invested close to $25,000 himself last year.
"Almost all of my savings was put into this, and about five years of hard work," Sherwood said.
The Federal Aviation Administration demanded that the company raise at least $6 million before it could buy the first of four BAe-146 jets -- each with 108 seats -- and receive certification.
Stuck on the runway: West Coast, which also did business as West States Express, presented plans in mid-2000 to fly from Livermore Municipal Airport and Concord's Buchanan Field. But local residents opposed both plans.
As late as last March, West Coast officials said they planned to fly four DC-9 aircraft between Reno/Tahoe International Airport and San Jose, Stockton, Long Beach, San Diego, Las Vegas, Portland, Seattle and Denver.
"We haven't heard a thing from them (since)," said Adam Mayberry, spokesman for the Airport Authority of Washoe County, Nevada.
But there may be more to West Coast's problems than an inability to raise funds during a tough economy.
Commission suspicion: The airline claimed $125,000 in losses for improper commissions paid to former Chairman Alan Painter, according to the company's filing with the U.S. Bankruptcy Court in Oakland. It isn't clear in the court filing why West Coast opposed the commissions or why Painter was paid the money in the first place, but Sherwood said earlier this month that Painter was supposed to introduce "financial people" to the company.
Painter, who also sued West Coast in Orange County Superior Court, left the company in January 2001. Helen Painter, the airline's vice president, also left the firm.
Neither Painter nor his attorney in the Orange County action, David Kahn, could be reached for comment.
Painter, according to Sherwood, was introduced to West Coast's organizers as "an aviation expert with a lot of money." Sherwood said Painter claimed to be a former principal of the old West Coast Airlines.
Skeptical, Sherwood said he asked for five references and received confirmation from three. Later, Painter suggested a stock offering by the company, Sherwood said, and West Coast's attorneys suggested all of the principals fill out an application. Only the Painters refused, Sherwood said.
"I said, `You either sign or you resign,'" Sherwood recalled.
"(Painter) and the company don't get along," said Michael Primus, a Walnut Creek attorney representing West Coast in bankruptcy court.
Still, Sherwood isn't giving up. He hopes to someday launch an airline, modeled after Southwest Airlines and flying to small communities that aren't served by larger airlines.
"When you find someone really interested in promoting air travel, it's really a passion for them," he said.
Source <a href="http://members.brabant.chello.nl/~j.vanderschaar00/news.htm" target="_blank">Aviation News</a>
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Well that is too bad. Might have been a job in it for me somewhere down the line (not that I knew anything about it until now).
Having just got back from Vegas via SW, all the time spent on the road to OAK, etc; CCR or LVK would have been much nicer.
Maybe I could do it with a PA28-161??
$1m outta cover my yearly start up rate!
Having just got back from Vegas via SW, all the time spent on the road to OAK, etc; CCR or LVK would have been much nicer.
Maybe I could do it with a PA28-161??
$1m outta cover my yearly start up rate!
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Another California boondoggle...spent many years there in aviation, and saw the same repeated over and over..too bad for the folks who lost their money....
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The Idea excellent and the CEO Ray Sherwood a very fine man with excellent knowledge of the airline business at every level. Flew as his copilot for 2 yrs on the DC-8 at Rosie and learned a lot from him. I hope he will not give up and pursue his goal.
[ 17 January 2002: Message edited by: a320captain ]</p>
[ 17 January 2002: Message edited by: a320captain ]</p>
