OneJet suspends flights, says it will ‘reopen’
Troubled airline begins ‘transition’
OneJet, the beleaguered regional airline recently hit with a federal tax lien for unpaid excise taxes and a lawsuit seeking to recoup incentives it was paid to bring service to Pittsburgh, has suspended all flights.
In a statement posted Wednesday on its website, OneJet said it is suspending scheduled service on current routes while it transitions its operations to a “fully owned 135 operating certificate over the next eight weeks.”
“Please accept our apologies for any inconvenience caused by this disruption; the result of this transition will be a more robust and reliable operation for our customers from the fourth quarter forward,” the airline stated.
“We presently expect inventory to reopen for sale beginning October 1 and will make additional information available at that time.”
The suspension comes about two weeks after OneJet was hit with a federal tax lien filed in Allegheny County Common Pleas Court for nonpayment of $621,556
in excise taxes dating back to Sept. 30, 2015.
In an email, Matthew Maguire, OneJet’s CEO, said the airline is aware of the tax lien and “it’s being resolved immediately.”
He also said the airline is current with the Allegheny County Airport Authority, operator of Pittsburgh International Airport. Bob Kerlik, an authority spokesman, said the airline has paid $38,729 in airport charges it owed as well as a $54,000 security deposit.
The authority sought payment of the security deposit as part of a lawsuit it filed against OneJet earlier this month to recoup $763,000 of $1 million in incentives it paid the carrier for service from Pittsburgh International.
That subsidy was awarded in exchange for service to 10 destinations, including seven new markets. After hitting 10 at one point, the airline, before suspending service, was down to two — Hartford and Indianapolis.
Under its 2016 agreement with the authority, OneJet was required to maintain round-trip nonstop service at least five days a week for at least five years to the new destinations. The authority sued earlier this month, claiming it had not done so.
Mr. Maguire has said the airline plans to incrementally restore the flights it has cut from Pittsburgh as it upgrades to larger 30-seat planes. It typically has been flying seven seaters from the airport.
Earlier this month, OneJet’s proposed acquisition of Ultimate JetCharters, an Ohio-based charter company that operates Ultimate Air Shuttle, was canceled.
Rick Pawlak, managing director of Ultimate Air, declined at the time to state the reasons but said it had nothing to do with the lien or the lawsuit.
In his email, Mr. Maguire said OneJet will be acquiring an existing carrier with a 135 operating certificate. That certificate covers commuter and air taxi operators generally flying aircraft with fewer than 10 seats, according to the Federal Aviation Administration.
The certificate, which requires FAA and U.S. Department of Transportation approval, “is the ticket to operating, literally,” said Robert Mann, president of R.W. Mann & Co., an airline industry consultant.
Mr. Mann said OneJet has been flying using the operating certificate of Tennessee-based Corporate Flight Management Inc., which does business as Contour Aviation.
Obtaining a 135 certificate, Mr. Mann said, can be a protracted process, with reviews by the FAA concerning safety and operating issues and the Department of Transportation relating to financial fitness.
He spoke before it was learned that OneJet is trying to acquire an existing carrier’s certificate. It is unclear how the timetable would be affected in that case.
Normally, under the certification process, the federal lien and the authority’s lawsuit would be scrutinized. The airline also would have to show it has “enough capital to satisfy existing concerns plus start a new airline,” Mr. Mann said.
Besides the flights to Indianapolis and Hartford from Pittsburgh, OneJet also had service in Buffalo and Albany before announcing the suspension.
Mr. Kerlik said this year through July, OneJet has carried 17,488 passengers to and from Pittsburgh, less than 1 percent of all traffic.
News of the suspension came the same day Allegheny County Controller Chelsa Wagner called for the resignations of airport authority board members Robert Lewis and Jan Rea because of their investments in OneJet.
In a statement Wednesday, she urged county Executive Rich Fitzgerald, who appoints the board members, to request the resignations. She also asked him to to determine if any others have financial links to firms that do business with the authority.
“For board members to stand to gain or lose financially from their decisions on the airport board is the textbook definition of ‘conflict of interest,’” Ms. Wagner said.
Mr. Fitzgerald could not be reached for comment.
When the news first broke about Mr. Lewis’ investment, Mr. Fitzgerald said he hadn’t seen anything to suggest the board member used his influence to enrich himself financially and that he had no plans to remove him or ask him to step down.
Airport Authority Solicitor Jeffrey Letwin has said he sees no conflict in Mr. Lewis and Ms. Rea sitting on the board despite their OneJet investments as long as they recuse themselves on any votes involving the airline.
Ms. Rea has said she and her husband, Don, invested in OneJet in June, well after the incentives were awarded and two months before the lawsuit was filed.
She said they purchased notes — the “minimum amount” — the airline was offering to potential investors so that they could avail themselves of private charter flights the carrier offered to Naples, Fla.
In a brief telephone interview Aug. 20, Mr. Lewis, board vice chairman, at first said he “did not invest,” but when pressed further refused to discuss anything about the carrier. Mr. Maguire confirmed that Mr. Lewis had invested.
Mr. Letwin said that any investments made by Mr. Lewis came “well after” the subsidies were awarded. Mr. Lewis also serves as a nonvoting member of the OneJet board.