FOR IMMEDIATE RELEASE
Tuesday, March 23, 1999
Contact: Bill Mosley
Tel: (202) 366-5571
DOT 41-99
DOT Proposes to Revoke Kiwi Certificate
The Department of Transportation today proposed to revoke the operating certificate of Kiwi International Airlines for failing to meet federal fitness standards for air carriers.
In a show-cause order, DOT said that it tentatively has found that the Newark, N.J.-based carrier no longer meets any of the three standards for airline fitness: adequate financing, competent management, and a willingness to comply with applicable laws and regulations. The fitness requirement is in addition to, and distinct from, Federal Aviation Administration (FAA) safety requirements. It is designed to assure that a carrier’s operations do not pose an undue risk to consumers.
"The department rarely revokes airline certificates, and does so only after we determine that the carrier cannot meet the necessary requirements," U.S. Secretary of Transportation Rodney E. Slater said. "A primary purpose of those requirements is to prevent potential harm and inconvenience to consumers."
Final action will be taken only after a thorough review of Kiwi’s response to the proposal.
In July 1992, the department found Kiwi fit, and two months later issued the company a certificate to conduct passenger service. In late 1998, the department learned that the carrier was not making timely payments for fees and services, including passenger facility charges (PFCs), to its airports. A Jan. 8, 1999 letter from the department reminded the carrier of its responsibility to pay the fees, but subsequent checks revealed that, by Feb. 19, the carrier owed more than $750,000 to airports. In addition, Kiwi’s financial condition had deteriorated, with an operating loss of $19.8 million in 1998 and a net loss of $20.6 million. The carrier’s attempts to cut costs were unlikely to ease its financial crisis, the department said.
The department added that it was no longer confident that Kiwi’s management, with a complete turnover in key management personnel in less than a year, could effectively direct the carrier’s operations. Also, its failure to pay PFCs as required by law shows a serious disregard for federal requirements, the department said.
Objections to the tentative decision are due within 14 days, and answers to objections seven days afterward. After the comment period ends, the department will review all comments and prepare a final decision.
The show-cause order may be obtained via the Internet at http://dms.dot.gov//reports/reports_aviation.asp.
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