AirCal Orders British Jets to Counter PSA : Quieter Planes Give Rival the Edge at John Wayne

AirCal Inc., struggling to topple Pacific Southwest Airlines from its new dominance at Orange County’s John Wayne Airport, said Thursday that it has placed a $100-million order for six of the quiet BAe-146 jets that have given PSA an edge at that highly lucrative location.

“We are not going to be in a situation of being less than the dominant carrier in our hometown,” AirCal President David A. Banmiller said at a news conference.

San Diego-based PSA and AirCal compete head to head in the West Coast air corridor from Los Angeles to Seattle. But Newport Beach-based AirCal claimed the lion’s share of the traffic at John Wayne Airport until last year, when PSA was able to use the 20 new jets it purchased from British Aerospace to take advantage of the airport’s stringent noise control regulations.

Both AirCal and PSA acquired new aircraft last year in order to qualify for additional flights at the county operated airport under a plan designed to encourage quiet aircraft and thus appease communities near the airport.

Increased Flights

While AirCal’s new Boeing 737-300 jets qualified for additional flights, PSA’s BAe-146 aircraft registered such low noise levels on takeoff that it was exempted from any existing flight limitations.

As a result, PSA last year increased its daily flights at John Wayne from six to 23, while AirCal was held to 15.5.

William Lyon, AirCal’s chairman and chief executive, said AirCal signed the agreement with British Aerospace late last month. The jets are configured to accommodate 85 passengers seated five abreast.

AirCal expects to take delivery of two of the jets by April 1, a third in May, a fourth in June and two more in early 1987. Lyon said it is still uncertain how AirCal will finance the purchase of the jets, though the company is holding discussions with banks and leasing agencies.

John Pincavage, an airline analyst with Paine Webber in New York, said, “Orange County is a significant airport for (AirCal), so they really needed to do something to get back at PSA.”

However, AirCal has lost some momentum to PSA, said Greg Kieselmann, an airline analyst at Morgan, Olmstead, Kennedy & Gardner in Los Angeles. “PSA already has the jump on them,” Kieselmann said, noting that it takes time to break in new planes and their flight personnel.

PSA spokeswoman Margery Craig said PSA officials felt vindicated at the announcement of AirCal’s decision to follow in PSA’s footsteps.

Craig said that since PSA announced it was buying the BAe-146, “AirCal, from the president on down to the flight attendants, has been bad-mouthing” the aircraft. Among other things, she said, AirCal officials complained that the plane was too noisy for passengers--a fault that a manufacturer’s spokesmen at Thursday’s press conference said had been corrected.

“And now they are going to have to eat a little crow,” Craig said of AirCal.

Craig said PSA is “very much enamored” of its new British-built planes and noted her company’s announcement Wednesday that it has decided to order four more, with deliveries scheduled for the spring of 1987.

Besides enabling PSA to get the upper hand at John Wayne Airport, Craig said the relatively small jets have also given PSA an opportunity to initiate new routes to smaller cities that until now have been without jet service. Last month, she said, PSA started BAe-146 service to six new cities from Baja California to Washington state.

British Aerospace officials said sales of the BAe-146 have been brisk since it went into service in 1983. So far, the company has received orders and options for 89 planes worth $1.4 billion, according to W. Gordon Wilson, British Aerospace’s executive director of sales.

He said the introduction of the BAe-146 coincided with the U.S. government’s deregulation of airlines, which spurred competition.

“With deregulation, there is a need to increase frequencies (of flights) to keep the competition at bay and therefore smaller airplanes are becoming more popular,” Wilson said.

Also, Wilson said, a worldwide push for quieter aircraft is expanding the potential demand for the BAe-146. So far, he said only Fokker, a Dutch manufacturer, is building a comparable jet and it, he added, will not become available until 1989. “We’ve got another three years to establish our market,” he said.