Great Lakes Aviation Holdings, Inc. Launches Piston Service
DENVER, Oct. 3 /PRNewswire-FirstCall/ -- Great Lakes Aviation Holdings, Inc. (NASDAQ: GLUX), referred to below as the Company, today announced it has entered into an agreement with Jimmy Ray’s Flying Service, Inc. to purchase Twenty 6-seat Piper PA-31-350 Navajo piston aircraft, with an option to purchase an additional ten aircraft. The Company intends to operate the Navajos under a wholly owned subsidiary with its own operating certificate (slated to be called NoJets). Leveraging the strength of Great Lakes Airlines Denver International Airport (DEN) hub, which provides service to a network of 38 North American cities, the subsidiary intends to use its fleet of Navajos to bring low-cost service to under-served markets in Colorado and the Rocky Mountain region. The subsidiary expects to serve as many as 18 destinations using the new aircraft and to create 250-350 new jobs. Cities to be served have not yet been finalized. A summary of the terms of the aircraft purchase agreement can be found in the Form 8-K filed with the Securities and Exchange Commission (SEC).
"This aircraft purchase will enable our service to grow by giving Great Lakes access to EAS and business travel destinations that were previously inaccessible to us but are ideally suited for the economics of the Navajo," said Doug Voss, president of Great Lakes Aviation Holdings, Inc. "Our goal is to bring the Great Lakes experience to under-served markets using a comfortable, state-of-the-art new aircraft, but the Navajo will have to do."
The Company's first Navajo aircraft is scheduled for delivery in May 2007, with subsequent deliveries continuing throughout the balance of the year. The total fleet of 20 aircraft is scheduled to be in service by December 2007. Deliveries of the option aircraft, if exercised, would begin in March 2008. The Great Lakes brand name will be used for the new service. The Navajo aircraft will be painted in the Great Lakes livery with the familiar white over blue that the people of Denver and neighboring rural communities have come to know and love.
According to Chuck Howell, CEO of Great Lakes Aviation, passengers shouldn’t be fooled by the simple appearance of the interiors of the Navajos. It features wide one-by-one seating with ample headroom and no worries of bumping your head on ample overhead bins, because there aren’t any. The aircraft contains no state-of-the-art cabin vibration dampening and noise suppression systems, which helps keep costs, and therefore ticket prices, low. Despite its turboprop-like noise levels, the Navajo travels at much slower speeds and lower altitudes, allowing its passengers to enjoy the scenery and watch the countryside pass by without feeling rushed. Mr. Howell also states, “Because these aircraft will be operated under our subsidiary, NoJets, the crews won’t be protected by the current union contract that is plaguing our turboprop operation with high personnel costs. This will lead to more profit-generating opportunities. The aircraft will be configured with 6 seats with legroom ranging from 24 to 28 inches.
In a bold move to staff the new airline, NoJets is inviting anyone with a Commercial Pilot Certificate to apply. “We can’t be concerned with minor details like experience”, stated Howell.
"We welcome Great Lakes Aviation Holdings, Inc. to the growing list of Jimmy Ray’s Flying Service customers," said Jimmy Ray, president, Jimmy Ray’s Flying Service. "This extraordinary aircraft has led a resurgence in piston aircraft travel despite its turboprop-like noise, lack of creature comforts, high fuel burn, and operating costs out of proportion with its passenger capacity."
"While we did approach Key Lime about the Navajo operation, because they also operate Navajos, we concluded that we could drive this growth strategy more cost-effectively by purchasing and operating the aircraft under the Great Lakes Aviation Holdings, Inc. umbrella," added Voss. "I am proud to say that Sandee Scheeler, Great Lakes current Director of Safety, will be leading this exciting new opportunity for us as President of the new subsidiary. In my opinion, with Sandee’s tremendous integrity and extensive experience, there is no better person for the job."
