Sunday, October 26, 1997

Former FAA chief pursues dream of running airline from Love Field

By MICHELLE MITTELSTADT / Associated Press Writer

WASHINGTON (AP) -- As head of the Federal Aviation Administration during the Reagan years, T. Allan McArtor learned how to navigate Washington's power corridors.

That knowledge has come in handy as McArtor tiptoes through the thicket of political, legal and bureaucratic entanglements that stand between him and realization of his dream of operating an airline out of Dallas Love Field.

Still many months away from putting its first plane in the air, Legend Airlines has hit plenty of turbulence.

Stymied by a Transportation Department ruling last year that seemed to preclude Legend's ability to fly out of Love Field, McArtor and the would-be carrier's lobbyists turned to Congress for help.

Assistance came in the form of Sen. Richard Shelby, chairman of the Senate transportation appropriations committee. But the Alabama Republican's help went well beyond overturning the Transportation Department ruling. Shelby touched off a furor in proposing repeal of the federal flight restrictions that have governed travel out of Love Field since 1979.

In the face of intense opposition from American Airlines, Sen. Kay Bailey Hutchison, R-Texas, and others, Shelby didn't go all out for repeal of the Wright Amendment this year. But he did succeed in watering down the law -- significantly altering the aviation landscape for Love Field and nearby Dallas-Fort Worth International Airport.

The effects of the congressional intervention are still rippling through the region. Already, Fort Worth has sued Dallas over the Wright Amendment, and other litigation isn't unexpected.

The fact that Legend's name has been prominently linked to the Wright Amendment hubbub doesn't faze McArtor. In fact, he says the start-up airline will gain goodwill from a public overwhelmingly in favor of lifting the flight restrictions.

The former Vietnam combat fighter pilot also professes to be unfazed by the heavyweight opposition from American Airlines, noting that Southwest Airlines, headquartered at Love Field, also had to dodge heavy artillery from some of the same quarters during its start-up two decades ago.

Southwest's low-fare focus isn't one McArtor and Legend are seeking to emulate.

Legend aims to target a narrow -- yet well-heeled -- niche: The business traveler. While business travelers make up only 9 percent of all frequent fliers on major airlines, they account for approximately 45 percent of all passenger revenue.

And Dallas-Fort Worth International Airport, where American Airlines reigns, has the highest business airfares in the country, according to Legend.

"It's the business traveler that's getting hosed the most on airfares," McArtor said during a recent interview while in Washington to monitor Wright Amendment developments.

Legend hopes to appeal to consumers on the basis of service and comfort rather than cheap fares. With a business plan that includes retrofitting jets that typically seat 100 people to hold just 56 seats, McArtor says: "We can't be an $89 ticket airline."

Love Field is central to Legend's marketing plan of a service-oriented airline that maximizes passengers' comfort while minimizing their door-to-door travel time. With Love Field conveniently nestled in central Dallas, McArtor hopes to appeal to the businessman on the go, hungry for a short commute to the airport, valet parking and a brief stroll through the terminal.

"Our product is actually productivity," he said. "It's an upscale business product."

Legend wants to begin operations by next summer with six DC-9s or Boeing 737s, roomy planes that will be reconfigured with 56 seats. McArtor says he is putting together $32 million in capital to get Legend off the ground. So far, McArtor said Legend has commitments from 26 individuals for as much as half of the $32 million target.

Some aviation industry analysts question whether Legend can navigate all of the hurdles and find financial success in a narrow business niche.

"Those types of airlines have never really worked before. They've been tried," said Raymond Neidl, an airline analyst with Furman Selz in New York. "I have grave doubts just on the basic economics" of operating 56-seat jets, he added.

Legend wants to fly from Dallas to points as far west as San Jose, Calif., and as far east as Atlanta, with routes including Chicago, Kansas City, Denver and Nashville.

Beyond pulling together the financing and countless other issues ranging from obtaining planes to hiring workers, Legend also must meet FAA certification requirements.

Discussing his goal of getting planes in the air by late spring, McArtor acknowledges: "A lot of things have to happen by then, I have to say."