After turbulent year, United Express

WASHINGTON (AP) — The last year has been a rough ride for Great Lakes Aviation, a United Express carrier that many Midwest towns rely on for air service.
The carrier was already in deep financial trouble when the Federal Aviation Administration moved in last May to temporarily shut down Great Lakes, saying many of its planes weren’t airworthy. At the time, the FAA was coming off heavy criticism for its handling of safety problems at ValuJet.
The FAA forced Great Lakes to overhaul its maintenance program, replace its chief quality inspector and submit each plane to FAA inspection before putting them back in the air, according to agency records.
A year later, FAA officials say they’re confident of the carrier’s safety, although it is still subject to more pilot and maintenance inspections than other airlines. And because the carrier has complied with the terms of a consent order, Great Lakes will pay only $300,000 of a possible $1 million fine.
Meanwhile, Great Lakes has refinanced its debt, signed new contracts with its pilots and mechanics, acquired newer aircraft and launched a significant expansion at its Denver hub to make up for the lost business.
Great Lakes said it spent $9.2 million on the shutdown and related expenses last year, contributing to an $18 million loss in 1997. At the end of the year, six planes had still not been returned to service.
Great Lakes, based in Spencer, Iowa, added 14 new cities in April and plans to add another four next month.
The company’s stock is selling for around $3 a share, up from about 60 cents a year ago.
“They are on the road to recovery,” said Brian Simpson, vice president of the Boyd Group, a Colorado-based firm that analyzes the airline industry. “They’ve come out of the FAA order OK and they’ve got some new opportunities now” in Denver, one of Great Lakes’ two main hubs along with Chicago.
The FAA had been watching Great Lakes closely before grounding its planes last May 16.
One of every five planes the FAA had inspected before the shutdown had to be removed from service, and agency officials had serious concerns about the entire fleet, they told a congressional committee. They said they found hundreds of problems with the planes, from a cracked wing rib to a missing control cable.
Under the consent order, every Great Lakes plane had to undergo a special inspection before it could be returned to service, and the airline had to beef up its maintenance and inspection program.
In June, after more problems were found at the airline’s Huron, S.D., maintenance base, the FAA demanded that the airline replace its chief inspector for quality assurance, according to FAA records. The agency said the first plane it inspected at Huron had at least 80 problems.
Great Lakes has denied that it was ever unsafe.