It’s all over except the shouting, and lawsuits, for North County’s only airlines, or at least the 2-month version of one, as California Pacific Airlines blew up this week in the darkened skies of a reported debt of at least $6 million and apparent mismanagement.
California Pacific Airlines, launched flights on Nov. 1 last year from Carlsbad’s McClellan-Palomar Airport to San Jose, only to halt service in late December, citing a nationwide pilot shortage. The airline operated Embraer SA E145 aircraft, and had planned to complete additional pilot training in January and resume service, according to Bloomberg News.
The carrier, which had nearly 90 employees, put all staff on furlough Jan. 18 “with no return to work date,” company spokesman Ryan DiVita said Thursday in an email. He referred further questions to the airline’s Carlsbad office, which did not return a call seeking comment.
“CPA regrets the pilot shortage has impacted its customers and appreciates their patience while working to minimize the length of downtime,” the company said in a Dec. 28 news release. The airline had planned to complete additional pilot training in January and resume service.
Soon-to-be laid off California Pacific workers from Atlanta, Georgia to San Diego sounded off-the-record about the airlines’ broken runway of shattered dreams.
“I have been working for the company Vallas purchased for over 3 years. Today, 80-ish employees should receive a check for working January 1 – January 15. That’s not going to happen. The payroll for December 16-31 still have not been paid. Affecting 83 employees. One of my coworkers had a gofundme set up by a neighbor as he is the single earner in the family and his wife was in ICU for 10 days. No aircraft are on the certificate as they have all been repossessed.”
— Former California Pacific employee in email to The Grapevine Wednesday
Another worker said: “California Pacific failed to pay employee insurance premiums for three months. Did they pocket the money or what? Class action Lawsuit could be brewing.”
California Pacific acquired its fleet and operating certificate in May 2018 when the company purchased Aerodynamics Inc., which operated federally-subsidized Essential Air Service routes from Denver, Colorado to Pierre and Watertown, South Dakota. Those flights have also ended.
The airline was the vision of entrepreneur Ted Vallas, who turns 98 in March. Vallas saw the airline as an alternative for residents of North San Diego County who did not want to make the roughly one hour drive to San Diego International Airport.
The 97-year-old man behind the curtain says
Previous reports about Vallas’ pie in the sky airlines scheme dating to the mid-2000s put his investment at either $1 million, $2 million or $4 million. Current reports indicated he owed over $10 million, not including employee salaries and money owed entities such as South Dakota airports and airplane lessors.
Reached for comment Friday by the San Diego Union Tribune, Vallas was defiant that California Pacific would be back in the air before summer.
He said the airline would be announcing new venture capital funding in the coming weeks, would purchase up to six more planes (adding to its fleet of four Embraer ERJ-135 twin jet planes) and was invigorated by a new concentration on only West Coast destinations.
“We are still going,” he said, blaming current woes on pilot shortages. “We still have about three weeks of training with pilots.”
Vallas said he didn’t think it needed to change the name before starting again. “It’s not tarnished. In fact, it’s a great name,” he said. “Changing the name is not the way to do it. The way to do it is to get in there and give some great service.”
Having commercial air service at Carlsbad, about 35 miles north of downtown San Diego, was a long-held dream of 97-year-old Ted Vallas, a serial entrepreneur from the area who made his fortune in international golf course and resort projects, including Rancho Santa Fe’s Whispering Palms.
Vallas has a history of statements that don’t come to fruition, according to the Union-Tribune. In 2016, he announced that the airline would start operations in four months. However, officials with San Diego County, said at the time it had rejected its most-recent application and could take up to two years to do an environmental review.
A similar situation happened in 2013 when Vallas and a new executive officer said it could get the airline operational by the end of the year. In 2010, Vallas said he was planning to get the airline off the ground by 2012.
Call them crazy, but…
“I have a better chance of dating a Hollywood celebrity than Cal-Pacific does of ever flying again,” Henry Harteveldt, a travel industry analyst with Atmosphere Research Group, said in early January.
“The airline had shown its existing leadership were incapable of operating an airline,” Harteveldt said to the Union Tribune. “While he said an airline out of Carlsbad was a good idea, California Pacific was not the operation to do it. Any venture capitalist that would put money into California Pacific with the current leadership team, or anyone there, is throwing good money after bad,” he said.
Harteveldt said Vallas and the name “California Pacific Airlines” had to go for anything to be made of the airline.
“California Pacific represents an airline that was not reliable,” he said. “It shut down without notice, stranding passengers and doing a disservice to its employees and investors.”
Cry not for thee, South Dakota
California Pacific was the only air service to central and northeastern South Dakota including Pierre, the state capitol, and Watertown. The sudden grounding caused a lot of consternation, not to mention travel disruption throughout the region.
Nobody knows if California Pacific Airlines will pay back any of the thousands of dollars it owes to jilted passengers and erstwhile supporters of the airline, such as the city of Pierre with $38,000 in unpaid bills.
On Wednesday, South Dakota Attorney General Jason Ravnsborg issued a news release saying his Division of Consumer Protection would try to help passengers who paid for tickets.
“At this time the CPAir website is promising refunds to current ticket holders but the customer service phone lines for CPAir have been, for the most part, unresponsive,” according to Ravnsborg. He said customers seeking refunds from the airline can go online at www.consumer.sd.gov., or call 800-300-1986, to submit a complaint to Ravnsborg’s office.
Pierre Mayor Steve Harding joined with Watertown Mayor Sarah Caron in asking officials at the U.S. Department of Transportation to intervene to make it possible for the two communities to find another airline, according to the (Pierre) Capitol Journal.
Harding said DOT officials have responded better than he expected, putting out an accelerated schedule for interested airlines to send DOT bids for a contract to provide air service under the Essential Air Service program designed to subsidize passenger air service to small, isolated communities.
On Thursday, the U.S. Department of Transportation revealed that four airlines had submitted proposals by midnight, Jan. 30, to provide subsidized air service to Pierre and Watertown, South Dakota.
“We want to keep this process going,” he told the Capital Journal. “I will bring a recommendation to the City Commission so we can all vote on it on Tuesday (Feb 4) and get it back to the U.S. DOT as soon as possible.”
California Pacific, which bought Aerodynamics early last year, was awarded a two-year EAS contract beginning Aug. 1 paying the airline $7.1 million per year to fly 12 round trips weekly of a Watertown-Pierre-Denver route. But once CPAir began flying unsubsidized flights from its Carlsbad, California base to Las Vegas and Phoenix, service to South Dakota began to decline last fall, Harding said.
Now, he’s optimistic that a new airline soon will be flying to Pierre again, Harding said. Only one airline, SkyWest Airlines of St. George, Utah, has contacted city officials, and visited Pierre and Watertown earlier this month, the mayor said.
Once DOT informs Pierre and Watertown which airlines have bid for EAS contracts for the business, city officials can work fast to recommend their choice, Harding said. DOT makes the actual decision on which, if any, airline is awarded an EAS contract, he said.