Presidential Airways Inc., the upstart carrier that once hoped to dominate Washington Dulles International Airport but then submerged its identity to become a feeder airline for Continental, said yesterday it would resume flying under its own name and colors.
Effective Feb. 6, Presidential will cease operating as Continental Express but will continue to provide service, as Presidential, to the cities it now serves, said Harold J. (Hap) Pareti, the airline's president and chief executive.
Pareti said the two carriers had agreed to end the feeder arrangement -- announced just a year ago -- on terms that amount to no loss of income for Presidential, a company that has yet to turn a profit.
Pareti said unused credits for maintenance and other services that were part of the initial agreement with Continental would be replaced by favorable terms in its lease of facilities from Continental in the midfield terminal at Dulles.
Pareti said the credits Presidential was giving up in ending its relationship with Continental would also be reflected in the terms under which Continental will provide a reservation system for Presidential. "We're not forfeiting any funds or forfeiting any income at all," said Pareti.
The terminal in which Presidential now leases facilities from Continental was built by the Herndon-based airline as a symbol of the dominance it hoped to achieve at the airport, which was underutilized when Presidential began operations in October 1985.
During its first year of operations, the competitive situation at Dulles shifted dramatically. New York Air, a Texas Air Corp. subsidiary that is now a part of Continental, and United Airlines both established hubs at Dulles. Few airports provide enough traffic to sustain more than two hub operations, and Dulles proved no exception. On Jan. 12, 1987, Continental and Presidential announced they had signed a 10-year joint marketing agreement that would provide $15 million in cash for Presidential, which needed it badly.
Continental then had nearly 90 flights a day from Dulles and said it planned to increase that number, but in the past year it has reduced its service to fewer than 40 flights a day. Presidential operates 60 flights a day from Dulles, Pareti said.
Pareti said that a look at Continental's December schedule and the knowledge that the peak season for travel to Florida was in the offing prompted the decision to change identities once again. Presidential serves 13 markets, including three in Florida.
"It was the economics of the marketplace saying we have a different competitive situation at Dulles than we did a year ago. Continental was the largest carrier then. Now they're the third largest," he said.
Pareti said the airline has discussed providing feeder service for three carriers, which he declined to identify. If the airline agrees to provide feeder service for another carrier, it would do so in addition to providing its own service, not instead of, he said.
Pareti said the airline has revamped its fleet, substituting smaller, more fuel efficient British Aerospace 146s for the larger Boeing aircraft it once operated. The switch to smaller aircraft for smaller markets has reduced operating costs about 25 percent, he said. The BAe-146s give the airline an edge in markets that require quieter aircraft or that have shorter runways, he said.
Presidential is one of only three jet carriers left from the rash of start-up airlines that dotted the skyscape immediately following deregulation, Pareti said.