Valujet Fortunes Plunge; Stock Down 60 Percent
A year after one of its planes plunged nose-first into the Everglades, ValuJet is less than half the airline it was before the crash.
A costly three-month shutdown, intense regulatory inspections and a painfully slow return to service have kept the Atlanta-based discount carrier operating in the red. Executives say it will be several months before it starts making money again.
Although the no-frills service, heap fares and smiling “critter” mascot are still there, ValuJet hardly resembles the Wall Street favorite it was before the May 11, 1996, disaster that killed 110 people.
ValuJet flies just 25 planes to 22 cities, compared with 51 planes to 31 cities before the crash.
About 2,000 employees are on the payroll, down from 4,200.
ValuJet stock has dropped 60 percent to about $7 a share from $17.88 the day before the crash.
“It’s a smaller, poorer airline,” said Morten Beyer, an airline consultant from McLean, Va. “After living on hype and a high profile, they’ve been sort of brought down to Earth as just another airline, rather than a premier airline.”
ValuJet lost $41.5 million in 1996 and its executives don’t predict a profit until the third quarter, when they hope to get a boost from summer travelers.
ValuJet chairman Lewis Jordan insists the airline is battling back with the same tenacity that made it a runaway success after an audacious start-up in Delta Airlines’ back yard 3-1/2 years ago.
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