PIA - A History: The Airlines Retrench (1993-1994)

After sustaining massive losses in 1990-1992, some airlines were forced to implement drastic cost-saving measures and become more efficient. Peoria generally held its own during the early 1990s downturn, but suffered in its aftermath.

Here's a rundown of events by air carrier.

AMERICAN AIRLINES/AMERICAN EAGLE (Flagship Airlines/Simmons Airlines)
Both Peoria and Springfield had gained a second American Airlines roundtrip in May 1992. Springfield glimpsed an ominous future in November when the airline announced that it would halve its Springfield service on January 4, 1993. Nevertheless, PIA officials were hopeful that AA would soon add more jet flights.

They had reason for optimism. In January 1993, American Airlines requested the Federal Aviation Administration (FAA) increase the number of commuter slots available to jet aircraft with up to 110 seats from 70 to 140 and make the change permanent. A two-year, temporary rule allowing the jets to use 70 commuter slots was set to expire on August 1.

But nearly $1 billion losses for 1992 forced American Airlines to re-think its entire operation. Money-losing, short-haul jet service proved financially unsustainable. With load factors well below 50 percent, Peoria's afternoon turnaround was dropped July 1, 1993, replaced by a 34-seat American Eagle Saab 340 (operated by Flagship Airlines). Plans to use 64-seat ATR-72s were being considered for use by December (but wouldn't happen for a few years). An airline official told the Peoria Journal Star that the other roundtrip "will be there for a long, long time. We're committed to jets out of Peoria."

A "long, long time" turned out to be six months. On December 2, American Airlines announced that the last jet flights would end January 4, 1994, exactly 25 months after it began. The airline's fleet of 97-seat Fokker 100s were better put to use as replacements for the airline's aging Boeing 727-100s, and were a better fit than 144-seat MD-80s on most short-to medium-haul flights.

Those who lobbied for modification of slot restrictions on American Airlines' behalf felt betrayed. Rep. Robert H. Michel (R-Peoria) wrote a letter to CEO Robert Crandall expressing his feelings. Other officials accused the Fort Worth, Texas-based airline with wanting slot restrictions eased to aid in its battle with United Air Lines, which operated a far larger hub at Chicago-O'Hare. Furthermore, American, it was charged, intended all along to start money-losing, short-haul jet service to small cities where it obtained the most support then pull out as soon as new slot rules became permanent. Then, the slots would be used for short-haul jet service to larger cities.

I doubt American Airlines misrepresented its plans to Peoria and Springfield. News of jet service was made public in March 1990 when a still-profitable airline industry had yet to feel the consequences of a slowing economy and oil shock. By the time service began in December 1991, the national economy was still struggling with high unemployment and slow growth. An ill-conceived fare war in 1992 only deepened the industry's financial losses. I do believe, however, the airline knew that flying Fokker 100s into Peoria and Springfield would be unprofitable from the beginning, gave it a chance hoping for sufficient loads and held out far longer than it should have. By summer 1993, waiting for those slot rule changes to become permanent was a no-brainer, even if there was by then consideration to dump jet service. Losses sustained by a four-day flight attendants' strike around Thanksgiving that year might have been the final trigger.

Airport officials discussed legal action against the airline, but quickly realized its futility. Shortly after the last Fokker 100 departed for Chicago, CEO Crandall encouraged Peoria and Springfield to look for a route that would be more viable. A pre-deregulation-style Chicago O'Hare-Peoria-Springfield-Nashville routing was offered but nothing came of it. Strange that Peoria-Dallas/Ft. Worth was apparently left out of consideration.

American's pullout left Peoria with six weekday (five on Saturday) Chicago-O'Hare roundtrips on 46-seat American Eagle ATR-42s and a 34-seat Saab 340 (the latter operated by Flagship Airlines). An ATR-42 operated a once-daily Burlington (Iowa) tag-on. American Eagle (Flagship Airlines) still operated three daily Nashville roundtrips on a mix of Saab 340s and Jetstream 31s.

One fustrating service disruption occurred late in 1994. On October 31, an American Eagle (Simmons Airline) ATR-72 operating Flight 4194 from Indianapolis to Chicago-O'Hare crashed near Roselawn, Indiana, killing all four crew and 64 passengers. It did not take long to determine that ice build-up on the plane's wings caused mechanical failure, leading to the crash.

On December 9, 1994 the Federal Aviation Administration ordered ATR-42/72 operators to ground the aircraft if the temperature dropped to 40 degrees Fahrenheit or below. As a consequence, American Eagle was forced to cancel all flights between Peoria and Chicago-O'Hare until it could substitute a sufficient number of smaller Saab 340s re-deployed from southern hubs. Resumption of Chicago-O'Hare flights, delayed by cold-weather training for crews, had to wait until January 4, 1995. Restoration of ATR-42 service had to wait a little longer.

DIRECT AIR (dba Midway Connection)
When Gary, Indiana-based commuter carrier Direct Air announced plans in summer 1992 to provide Bloomington-Normal with service to Chicago-Midway, it must have hit Peoria officials in the gut. Why would a smaller city like B-N receive such service but not Peoria? After all, Midway Connection did well in both cities before folding into bankruptcy the prior November.

The answer was "not yet." In June 1993, a Lansing, Michigan-based investment group and Gary, Indiana-based Direct Air announced the creation of "Midway Connection Group" with the intent to restore service between Chicago Midway Airport and 25 cities. Eleven Fairchild Metro 23 turboprops were ordered in September. The airline would lease and sublease of several others (including a Metro III), totaling seventeen.

Direct Air merged into Midway Connection on November 1. Four weekday (fewer on weekends) roundtrips were operated on a Chicago Midway-Peoria-Springfield (IL) itinerary beginning November 15.

Also on November 15, 1993 the Midway Airlines name returned as two Fokker 100s, painted white with purple and yellow livery, began providing daily flights between Chicago Midway and New York's LaGuardia Airport. More spokes were added in coming months. "Midway Connection" painted at least one of its Beech 1900s in white, purple and yellow, but there appears to have been no official affiliation with the revived Midway Airlines.

Financial problems came to light during 1994. Service to Bloomington-Normal ended February 28 (routing via Champaign-Urbana probably hurt business). Midway Connection fell behind on rental payments at cities it served, including Peoria. Further signs of trouble came when the carrier terminated its contract with the manufacturer, Fairchild Aircraft Inc. on June 3. Three Metros were returned during June-July and replaced with Beech 1900s. Midway Connection filed for Chapter 11 bankruptcy protection on September 21.

The PIA Flight Guide for October-November-December 1994 shows a Saturday-only roundtrip to Carbondale, but it is unclear whether it was actually operated. The struggling carrier dropped several cities, including Peoria and Springfield (IL), on November 14. Soon, it suspended all service.

MIDWEST EXPRESS CONNECTION (Skyway Airlines)
Skyway Airlines dropped Bloomington-Normal and replaced it with Champaign-Urbana on May 10, 1993, using it as a stop for two of three weekday Peoria-Detroit roundtrips. Champaign-Urbana was dropped on September 9, making Peoria-Detroit roundtrips nonstop. All service, including a third Detroit roundtrip stopping at Rockford, ended December 15.

The service suspension was the consequence of a a decision by Skyway parent Midwest Express to dump Mesa Airlines as operator, replacing it with Astral Aviation. Peoria service never resumed.

NORTHWEST AIRLINK (Express Airlines I)
PIA's September-October-November 1993 Flight Guide was first to show an increase from three to four weekday roundtrips between Peoria and Minneapolis/St. Paul. By this time, the commuter carrier was back to using a mix of Jetstream 31s and larger Saab 340 turboprops, usually protecting two roundtrips each.

TRANS WORLD AIRLINES/TRANS WORLD EXPRESS (Trans States Airlines)
On November 4, 1993, TWA exited Chapter 11 after sale to its creditors and employees. The airline's debt load had been reduced by $1 billion, employees agreed to concessions and CEO Carl Icahn relinquished control to a new team. Its headquarters were moved from Mt. Kisco, New York to St. Louis.

With reduced costs, TWA planned for growth. In mid-April 1994, it announced the resumption of Peoria-St. Louis DC-9 jet service, twice-daily, beginning June 1. As a result, Trans World Express would reduce weekday service from eight to six roundtrips. The airline also announced resumption of service to Lincoln, Nebraska and Sioux Falls, South Dakota. Less than a month later, however, TWA put Peoria plans on hold when it was determined that DC-9s were better deployed to more profitable markets. Peoria was simply too close to St. Louis, according to TWA.

Trans World Express began 1993 with nine weekday (fewer on weekends) roundtrips between Peoria and St. Louis, using a mix of ATR-72, ATR-42, Embraer 120 and Jetstream 31 turboprops. The PIA March-April-May 1993 Flight Guide shows a reduction to eight roundtrips. Summer schedules were reduced further to seven roundtrips, probably due to increased use of larger turboprops. Frequency was back to eight roundtrips for the fall. In Summer 1994, service was cutback to seven roundtrips, but surged to nine that fall.

The loss, due to ice build-up, of American Eagle Flight 4194 on October 31, 1994 affected Trans World Express as well. On December 10, ATR 42/72 aircraft were temporarily withdrawn from service to comply with an FAA order and TWE temporarly replaced them with smaller, 30-seat Embraer 120s.

UNITED AIR LINES/UNITED EXPRESS (Air Wisconsin/United Feeder Service)
United Air Lines, per my recollection, continued to operate Boeing 727-200s on the Peoria-Moline-Denver runs through 1993 and 1994. Smaller Boeing 737-300/500s probably operated some flights o a periodic basis, but I don't recall when, which tells me that the service was at least marginally profitable. You don't use a bigger jet if a route is weak. That said, the airline industry was changing during this time, and pressure was high to reduce costs and become more efficient.

The Peoria Journal Star headline of October 11, 1994, United pulling service from Peoria airport., was a real kick in the head. The airline would drop its Peoria-Moline-Denver and Denver-Peoria-Moline-Denver itineraries on February 8, 1995. Initial reporting noted plans to shift a portion of the airline's fleet to the new "Shuttle by United," a low-cost subsidiary which operated on the West Coast. Boeing 737-300/500s were deployed on these flights, so the 727-200s were needed for other routes.

When Air Wisconsin moved its F-27 out of the Peoria market in 1992, it reduced weekday Chicago-O'Hare frequency to four roundtrips. Use of 64-seat BAe ATPs on those remaining flights still provided 256 seats in each direction daily.

In April 1993, UAL Corporation announced that Air Wisconsin was for sale. Interestingly, it sold the carrier's turboprop routes (BAe ATPs) to United Feeder Service, a subsidiary of Trans States Airlines, effective September 14 and jet routes (BAe-146s) to another firm which became "Air Wisconsin Airlines Corporation" as United retained rights to the former name. Both continued as United Express carriers.

In a strange twist never covered by the local media, Air Wisconsin dropped Peoria September 14, 1993. United Air Lines provided temporary replacement service between Peoria and Chicago-O'Hare, operating four daily roundtrips with what was probably its last Boeing 727-100! United Feeder Service began operating Peoria to Chicago-O'Hare route on October 31 using BAe ATPs.

When United Air Lines announced in October 1994 that it would withdraw, Air Wisconsin was deemed likely to provide replacement service using four-engine, 100-seat BAe-146s. Confirmation by the Peoria Journal Star, however, waited until early December. Peoria wouldn't lose jet service, as was often implied by the local media.

USAIR EXPRESS (Jetstream Int'l Airlines)
Although USAir failed to build its Indianapolis hub as planned, USAir Express's Peoria flights enjoyed stability through 1993 and into 1994. The carrier's Jetstream 31s operated four weekday (fewer on weekends) roundtrips.

But nothing in the airline industry lasts for long. Chautauqua Airlines replaced Jetstream International Airlines as the USAir Express carrier at Indianapolis on May 8, 1994. Peoria was not included in Chautauqua's plans, so service was dropped on that date.

AIR FORCE RESERVE UNITS
In summer 1993, the Federal Base Closure & Realignment Commission granted Chicago Mayor Richard M. Daley's request to close the USAF Reserve Station at Chicago-O'Hare International Airport. Two units on that base - the 126th Air Refueling Wing (KC-135s) and the 928th Airlift Wing (C-130s) - were to be relocated between 1995 and 1997. The City of Chicago, however, was required to pay for the move.

The lucky city which obtained the units would benefit from a full-time workforce of 3,000 and an estimated $70 million annual economic boost. Peoria officials met with Mayor Daley in February 1994 to lobby for the reserve units. The $115 million price needed to prepare the Greater Peoria Regional Airport for the move was deemed the lowest of any competitors' plan. Other airports seeking the reserve units were the Moline, Rantoul (the former Chanute AFB), Rockford, Scott Air Force Base near East St. Louis and Springfield.

Cost of relocating to Peoria increased to $150 million by May 1994. In October, Peoria and Springfield combined forces, submitting a joint proposal, hoping to leverage lower costs. Peoria would get the 126th and Springfield the 928th. (In the end, the 928th was disbanded and the 126th went to Scott Air Force Base.)

CARGO GROWTH AND AIRPORT EXPANSION
The new air cargo terminal in the southeast quadrant began operations May 3, 1993. The 36,000 sq. ft. building served Airborne Express, Emery Worldwide and Federal Express. The new facility was badly needed as the airport's cargo volume continued its growth with 32,954,889 pounds handled in 1993 and 38,354,914 in 1994.

Runway 13-31 extension to 10,000 feet was completed in 1993. Work on extending the other runway, 4-22, from 6,000 to 8,000 feet got underway in August 1993. By the time the latter project was completed in 1994, airport officials considered extending 13-31 to 12,000 feet.

The stated purpose of the project was to increase international trade out of Peoria, but I suspect a more specific reason. For many years prior, Caterpillar trucked emergency parts bound for overseas distribution centers to Chicago-O'Hare so they could be flown out in the belly of passenger flights, but dedicated freighter service at PIA might have been considered, thus the plan to extend 13-31.

NEWSPAPER SILLY SEASON
Twice the coverage, double the silliness (with apologies to Count Dooku).

The Peoria Journal Star's January 9, 1993 story on American Airlines' efforts to increase slot availability at Chicago-O'Hare used an uncorrected map which showed service to Milwaukee and Memphis (via Springfield).

The  July 8, 1993 edition alone shows how far journalism had fallen. The writer (notorious for sloppiness) wrote of American Airlines' decision to trim Chicago-O'Hare jet service

Only 15 months after launching the daily afternoon service by 97-seat luxury jet, American on July 1 switched to smaller, bumpier turboprops.

Why the need to editorialize? Just tell us the facts, and only the facts. Passengers can decide if smaller turboprops (34-seat Saab 340s) are "bumpier."

I suspect the writer was confused when he wrote the last paragraph

United Airlines has provided the only other jet service out of Peoria, daily flights to and from Denver, since the early 1980s, [GPAA airport director Ron] Burling said.

This alone is inaccurate since United began service here in the mid-1980s (April 1, 1984) but this assertion also suffers from gross inaccuracy when it excludes jet service provided by TWA, Ozark and Northwest/Republic.

A November 18, 1993 article by a veteran PJS writer notes that Skyway Airlines dba Midwest Express Connection planned to suspend service December 15. The writer twice calls it "Skyways" and incorrectly states that the airline was a subsidiary of "Midwest Connection."

MISCELLANEOUS EVENTS
On June 23, 1993, two F-16 Fighting Falcons belonging to the 182nd ANG collided during mock dogfighting maneuvers over southern Fulton County. One plane crashed into a cornfield after the pilot ejected safely. The other damaged plane landed safely at the Greater Peoria Regional Airport.

Six planes carried local ANG personnel to East St. Louis July 13 to assist in flood relief.

In August 1993, the airport authority considered hosting an air show in 1994. In November, it was decided that airfield construction would prevent such an event.

On September 14, 1993 a United Air Lines Boeing 727-100 from Denver made an emergency landing here after reporting landing gear problems, but landed safely.

PIA was visited for the first time March 27, 1994 by what was then the world's largest operating aircraft, an Antonov AN-124 "Ruslan" owned by Volga-Dnieper Cargo. A gold mine in eastern Russia purchased five Caterpillar D-8N tractors. Two were shipped by rail from Peoria to a port (probably Tacoma, Washington) but the other three departed the evening of March 28 on the big jet to beat the spring thaw, which would have made it impossible to transport such heavy equipment to the mine. The big Russian jet would make several more visits in coming years.

On June 1, 1994 Ronald W. Burling, 57, retired as airport director after 25 years. His replacement, Bruce Carter, 40, had been director at Springfield's Capital Airport three years.

It was announced in 1994 that the 182nd would lose its F-16s in 1995, but eight C-130 transports were to be deployed here as replacements.

SCHEDULE/ROUTE MAP
PIA traffic was up 8 percent the first six months of 1993, but slowed after that to total 428,000* for the year. The loss of one roundtrip jet on American Airlines mid-year may have contributed to the slowdown, but there were other factors. Continuing cutbacks hurt business so much that passenger traffic in 1994 (397,574) dropped below 400,000 for the first time in a decade.

The following schedules and route map for October 1994 were culled from the PIA Flight Guide for October-November-December 1994. Using weekday averages, American Eagle offered flights to Burlington, Iowa (1), Chicago-O'Hare (6) and Nashville (3); Midway Connection to Chicago-Midway (5) and Springfield, Illinois (1), Northwest Airlink to Minneapolis/St. Paul (4), TW Express to St. Louis (9), United Air Lines to Denver (2, most via Moline) and United Express to Chicago-O'Hare (4) for a total of 35 departures.

Estimates based on Illinois Airport Inventory Report enplanement figures.




- David P. Jordan

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