Atlantic Gulf Airlines was a regional airline in Florida that began operations in October 1983. Service started with two British Vickers Viscount four engined tubroprops. The airline began with service from Miami to St. Petersburg, Florida. By early 1984, the airlines had added Convair 580 turboprops to the fleet. The fleet grew to three of the Convair 580s and cities such as Tallahassee, Fort Lauderdale and even Atlanta, Georgia were added.
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The St. Petersburg market did not work out for Atlantic Gulf and the airline went into chapter eleven. The turboprop planes were returned to their lessors while the airline reorganized. In an unheard of move by a small airline in the 1980s, Atlantic Gulf continued to operate using a BAC 1-11 jet it acquired through a merger with the also bankrupt Air Illinois. The airline was also moved from St. Petersburg to Tallahassee.[1]
The airline also acquired two former Cascade Airways BAC 1-11s and began running service from Tallahssee to Miami, Fort Lauderdale and Atlanta. This schedule was pared back when the FAA grounded the two former Cascade jets claiming that the stage one noise waivers from Cascade did not transfer to Atlantic Gulf. The FAA also threatened Atlantic Gulf with heavy fines because the Cascade jets were BAC 1-11-400 series planes. The original Air Illinois plane and subsequent training program were for the less powerful and slightly different BAC 1-11 200 series planes. This, combined with a heavy D check due on one of the Cascade jets, left Atlantic Gulf with one serviceable BAC 1-11 jet for its entire system.[2]
In addition, Piedmont Airlines had started its well equipped and well funded dedicated Florida Shuttle using comparable Fokker-28 jets. Atlantic Gulf responded to this by moving its routes to the Caribbean. The main route was from Atlanta to Tallahassee to Miami to Grand Turk. Other Island destinations were added but the entire system had become dependent on one airplane.
To add more trouble to Atlantic Gulfs woes, the BAC 1-11 that was getting a heavy check had work on it stopped when an unexpected high priority contract for a foreign carrier unexpectedly popped up. The battle over the stage 1 waivers and the training issues had still not been resolved. The remaining airframe proved stalwart and did all that was asked of it but it was flying over 400 hours a month.[3]
Taking off from a newly resurfaced runway in Miami, a piece of debris (a roughly 2 inch piece of rebar) was thrown into an engine. The takeoff was rejected without incident but the jet was grounded. Only three suitable engines were located but none were available for lease. The different and more powerful engines of the 400 series jets were not compatible. With crushing competition inside Florida, a grounded fleet and dwindling cash resources the airlines ceased operations in 1986.[4]
The airline did have one Pyrrhic victory. Years after it folded, in a case that went before the U.S. Supreme Court, Atlantic Gulf won their lawsuit against the FAA over the transfer of Cascade Airways Stage 1 noise waivers.[5]