Two former officials of Pan American World Airways applied yesterday to the Civil Aeronautics Board to create Columbia Air, a new airline with plans to offer frequent, low-fare air service between Baltimore/Washington International Airport and numerous cities in the eastern half of the country.
The chairman of the newly organized airline, with headquarters at BWI, is Dan A. Colussy, a 10-year veteran of Pan Am, who spent his last 2 1/2 years there as president before leaving the company in December. David A. Hall, who spent 13 years at Pan Am, most recently as vice president-marketing resources, will be president of the new airline.
Columbia has asked for authority to fly between BWI and 30 cities within 1,000 miles, but said it tenatively intends to start with flights to and from New York, Boston and Detroit. It asked the CAB for expedited action on its application to allow it to start up sometime before Christmas.
Like other new airlines, such as Midway Airlines, New York Air and People Express and the enormously successful Southwest Airlines based in Texas, Columbia Air said it plans to start service with a two-tier pricing system offering travelers flights at fares considerable below what is available to them now. Tickets on flights during the business day generally will be priced between 35 percent and 45 percent below existing coach fares. Tickets for off-peak travel -- after 7 p.m. on weekdays and all flights on Saturday and Sunday -- will be as much as 50 percent below the lowest promotional fares available, Columbia said.
As an example, Columbia said it hoped to start 10 daily round-trip flights between BWI and New York's LaGuardia Airport with a $45 fare for peak travel and a $25 fare for off-peak flights. Current coach fares range between $70 and $77 each way; round-trip excursion fares with restrictions range between $77 and $130.
Also like the other new airlines, Columbia plans to use either Boeing 737s or McDonnell Douglas DC9s, the two-engine aircraft especially suited to the short-haul markets it plans to serve. The new airline said it would prefer to use DC9s.
Columbia estimated its initial capital requirements at $39 million, which it hopes to raise by a public equity offering and from commercial banks. Chemical Bank of New York has already agreed to be its lead bank and financial adviser in seeking financing for its plan to acquire up to 15 airplanes, according to the CAB filing. Columbia plans to begin operations with four planes and add new routes as planes come in.
"Columbia is the type of truly innovative, low-cost new entrant envisioned by the framers of the Deregulation Act," the airline's petition to the CAB stated. "It will offer high-quality, low-fare efficient service in many markets now totally without it, and will offer some of the first head-to-head, short-haul, low-fare competition to existing carriers at BWI."
T. James Truby, Maryland's state aviation administrator, welcomed Columbia's proposal, noting that BWI hadn't yet been identified as a major operating hub by a low-cost airline. "From the perspective of the region, I think the timing is very good here," he added. "It offers the potential for providing some relief to National [airport]; it will give people an option."
Columbia's application ends with more certainty the speculation that Colussy would take over the helm at Western Airlines if it were acquired by UNC Resources Inc., the Falls Church uranium company, a possibility raised earlier this year by UNC. UNC's interest in acquiring Western has waned, according to a preliminary prospectus it filed with the Securities and Exchange Commission last month. In the document, UNC disclosed that it owns 441,100 shares of Western's common stock, about 3.4 percent of the outstanding shares, but added that it "currently is not seeking a combination with Western and does not intend to increase its investment in Western materially."