Vanguard Airlines

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Vanguard Airlines
IATA
NJ		 ICAO
VGD		 Callsign
VANGUARD AIR
Founded 1994
Ceased operations 2002
Hubs Kansas City International Airport
Focus cities Chicago Midway Airport
Fleet size 15
Destinations 18
Parent company Vanguard Airlines, Inc.
Headquarters Kansas City, Missouri
Key people "Rocky" Spane
(Long-time CEO)
Jeff Potter
(CEO)
Scott Dickson
(Last CEO)
William A. Garrett III
(CFO)
Website flyvanguard.com (defunct)

Vanguard Airlines was an airline based in Kansas City, Missouri. For a time, Vanguard also had significant operations at Chicago Midway International Airport in Chicago, Illinois, until late 2000. It ceased operations on July 29, 2002, after filing for bankruptcy. The airline flew leased Boeing 737s and MD-80 aircraft to several destinations from its main hub in Kansas City at the time of its demise. Vanguard Airlines started service in 1994.

History

Early history

Vanguard was originally started as a Low-cost, low-fare airline, the purpose of which was to undercut the costs of the major carriers and so be able to charge lower fares. Super-low regular advance fares of as little as $29 each way were the norm. Sale fares of as little as $10 were not uncommon. By the time Vanguard started, however, most major carriers had learned how to deal with such competition. They simply lowered prices in the markets where these smaller airlines flew, making it impossible for the Low-cost airlines to make money.

Reservations

Reservations were outsourced to a call center in Lawrence, KS run by Dakotah Reservations, a division of Dakotah Direct (now owned by West Business Services). Reservation agents were mostly college students from the University of Kansas. Eventually the call center moved to Mission, KS.

Reinvention

A Vanguard Boeing 737 deicing at Denver International Airport. Deicing prevents ice build-up on flight surfaces, which can cause loss of control.

In 2000, the airline began a program to change itself from a Low-cost, low-fare airline to the more sustainable Low-cost carrier model. This type of airline had lower costs than the major carriers, but competed on more than just price. Service, on-time performance, leg room, frequent flier programs, and other factors are often used in this competitive model. No longer were the cut-rate advance-purchase fares well-below the major carriers. Only the full-coach fares, which fewer customers buy, were significantly lower.

The change program worked and the airline saw significant improvements in operational and financial performance. The summer of 2001 saw some of the best growth and performance the airline had ever achieved; but the September 11, 2001 attacks changed all that. In October, 2001, the airline cut 20% of its staff. Full-time hourly workers were cut to as little as 32 hours per week. The executive suite took a 25% pay-cut. The airline struggled to compete in a market that saw schedules cut by a third and planes flying half-full.

During this period, Vanguard also introduced a multi-color aircraft livery similar in concept to Braniff International Airways "Flying Colors" or Air Canada's "airline within an airline" concept, ZIP airlines. This paint scheme was adopted with the introduction of the McDonnell Douglas MD-80 Series aircraft and involved the stylistic painting of the new Vanguard livery, in varied hues upon different aircraft. As in the case of Braniff's ultimate "Ultra" or "wet-look", more restrained use of colors were favored by the design team, which conversely was to become Vanguard's final livery.

Post 9/11

The assumption made and popularized by many economic analysts was that airlines like Vanguard were forced into bankruptcy due to the industry downturn following the September 11 attacks in 2001. This may be an incorrect assumption for Vanguard and other airlines despite popular opinion. Shortly after the attacks, Vanguard received approximately $2–3 million in federal aid, as did most other airlines.

If this money had never been distributed, there is a possibility that Vanguard might have gone bankrupt before the end of 2001. The cost of moving Vanguard from the Open Skies reservation system to SABRE during 2001 forced the airline to invest millions that the airline could little afford. Company meetings between CEO Scott Dickson and Marketing Director Greg Aretakis and other staff became more numerous and serious as the year passed. On at least three occasions, the conclusions made by the CEO and Marketing Director was that the transformation of Vanguard from an Open Skies to a SABRE system had to work, or it would be the end of the airline.

Daily revenue records showed marked increases in sales overall, but difficulties in adopting SABRE overshadowed the successful sales increases. The money that the government remitted to Vanguard after 9/11 offered the airline a new lease on life. It would not sustain the airline forever, but it allowed for a few months of replanning. Companion fare sales and internet ticket hot deals helped keep the airline above water for several months, and the hopes of more funding from the Air Transportation Stabilization Board kept a positive outlook among airline staff.

The following summer was bad for most airlines, but worse for Vanguard. While operational performance continued to improve to summer 2001 levels, the airline was still saddled with $80 million in debt. Nervous about increased bookings, credit card processors required greater and greater assurances that they would not lose money if the airline failed. In his book about the bankruptcy of the airline, Scott Dickson wrote how these processors required surety bonds of 125% of sales to continue processing credit cards. As each ticket was sold, the airline actually lost money. It was unsustainable and on July 29, 2002 the airline ceased operations.

After bankruptcy

When operations ceased, National Airlines and Frontier Airlines immediately offered to take Vanguard passengers on a space-available basis.[1] Controversy broke out with other airlines that had accepted Air Transportation Stabilization Board grants immediately following the September 11, 2001 attacks. One requirement of these grants was to accept passengers from airlines that ceased operations for a nominal fee. Some airlines refused and others charged higher fees than allowed under the law. Eventually, most passengers reached their destinations.

Not long after the bankruptcy, Robert H. Brooks, owner of Naturally Fresh, Hooters restaurants and PACE Aviation, offered to purchase the airline. His offer was rejected and the company was eventually liquidated.[2] Its headquarters became the temporary offices of the Transportation Security Administration in Kansas City.

Destinations

Fleet

Final fleet

At the time the airline was grounded in 2002, Vanguard had 15 aircraft in its fleet consisting of:

Vanguard Airlines Fleet
Aircraft Total Passengers
(Business/Coach)		 Notes
McDonnell Douglas MD-81 1 132
(12/120)
McDonnell Douglas MD-82 3 132
(12/120) or (14/118)
McDonnell Douglas MD-83 1 132
(12/120)
McDonnell Douglas MD-87 2 112
(12/100)		 A smaller aft galley allowed more seats
than the normal configuration on an MD-87.
Boeing 727-200 2 164
(0/164)		 Wet leased from TransMeridian Airlines
Boeing 737-200 6 120
(0/120)

Previous fleet

Vanguard's fleet consisted of the following aircraft:

  • Boeing 737-300
  • Boeing 737-200 (Advanced and High Gross Weight variants)
  • Boeing 727-200 (wet-leased from Falcon Air Express, TransMeridian Airlines, and others)
  • McDonnell Douglas MD-81
  • McDonnell Douglas MD-82
  • McDonnell Douglas MD-83
  • McDonnell Douglas MD-87

References

  1. ↑ http://articles.cnn.com/2002-07-30/travel/vanguard.bankruptcy_1_vanguard-airlines-vanguard-chairman-national-airlines?_s=PM:TRAVEL
  2. ↑ http://www.nytimes.com/2002/09/26/business/vanguard-airlines-calls-bid-inadequate.html?src=pm

Dickson, Scott & Sumner, Tracy (2004). Never Give Up: Seven Principles for Christian Leaders in Tough Times. Uhrichsville, Ohio: Barbour Publishing, Inc. ISBN 1-59310-144-9.

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