Now-defunct Hooters Air still owes LVIA $2 million
Updated On: Sep 27 2012 04:27:23 PM CDT
Hooters Air still owes the operators of Lehigh Valley International Airport nearly $2 million, which probably never will be recovered from the defunct airline that last flew out of the airport more than six years ago.
LVIA can’t collect the money because Hooters Air quit operating and does not have any assets, explained Charles Everett, the airport’s executive director.
"To our knowledge, Hooters Air is not a functioning entity," Everett said.
Everett said Hooters Air flew out of LVIA from May 2005 until April 19, 2006. It offered flights to Las Vegas, Fort Lauderdale, St. Petersburg, Orlando, and Gary, Ind.
After Hooters Air ceased operating at the airport, the authority sued to recover money it was owed, primarily for fuel.
In August 2007, the airport received a judgment in its favor for $1,416,305.03.
Said Everett: “At any future date that the authority is successful in collecting on the judgment, the decision affords the authority an annual legal interest rate of 6 percent accruing from Jan. 4, 2006.”
Including that interest, Hooters Air owes the authority a total of $1,987,172.96, Everett said.
On Tuesday, solicitor Glenn Williams told the Lehigh-Northampton Airport Authority: “There really has been no progress in terms of identifying any ‘assets’ upon which to collect the judgment. There is no revelation that was recently discovered.”
Everett said Hooters Air was an LLC – limited liability corporation – that was separate from the well-known Hooters restaurant chain. But the planes bore the Hooter’s logo and two Hooters girls were on each flight, wearing their low-cut restaurant uniforms.
The airline and restaurant chain were separate companies owned by the same person – Robert Brooks – who is deceased, explained Susan Kittle, the airport’s external affairs director.
Williams told the authority that the corporate structure of Hooters Air was different than the restaurant chain, “which has been traded and changed hands a few times.”
Williams raised the Hooters Air issue because an authority board member requested an update on the status of the case, said Everett.
Everett said the airport never gives up trying to collect money it is owed, but in this case there does not seem to be any money to collect.
Also during Tuesday’s meeting, board member Jane Baker questioned why the airport authority is paying for a state lobbyist in Harrisburg -- former Pa. Sen. Joseph Uliana, of Bethlehem.
Baker said, and Everett confirmed, that there isn’t any state money available for the airport in Harrisburg.
"There's no money to get and we're giving away $3,000 a month," said Baker. "If we are watching every penny, it doesn’t seem that way."
"It might not seem that way to you, but we are watching every penny," said board Chairman Anthony Iannelli, who told Baker that Uliana is getting $3,000 a month.
But after the meeting, Everett said Uliana’s firm, Uliana & Associates, is being paid $2,500 a month, not $3,000.
Iannelli said Uliana’s annual contract was approved by a very narrow margin.
"It wasn’t a resounding endorsement because we were concerned about the cost, and we are watching that cost," said Iannelli. "Stay tuned.”
In late February, an attempt to end the board’s contract with Uliana failed in a tie vote. At that time, the board’s executive committee recommended not renewing that contract by a 4-2 vote. The board will review the matter at next month’s meeting.
During Tuesday’s meeting, Michael Dowd, the authority’s secretary-treasurer, reported: “We continue to lose income due to decreased air traffic. Landing fees are under by 21 percent and roughly $50,000. We have some challenges moving into 2013. We’ve got to find income.”
Stephen Thode, a frequent flier who teaches corporate and real estate finance at Lehigh University, questioned why LVIA now includes bus services in its monthly reports on airline passengers.
"I notice there has been a change in the way the traffic count is conducted," said Thode. "In previous months, the United bus that goes to Newark to drop passengers off to get on an airplane was not counted in the passenger totals. Beginning in July 2012, the airport is now counting those bus passengers as air travelers out of Lehigh Valley International Airport."
Thode said July was not a good month for the airport, with traffic off more than 29 percent compared to July 2011.
"But if the accounting of passengers was consistent with the past – in other words, not counting those 2,250 bus passengers to Newark – the number of people actually getting on an airplane at A-B-E would have been off almost 32 percent compared to a year earlier," said Thode. "I’m just curious as to why we are now counting bus passengers as air travelers."
Also during the meeting, it was announced that an ad hoc committee is being organized by board member Cindy Feinberg to create a vision for the future of Queen City Airport in south Allentown.
Feinberg said the committee will have about 10 members, hold its first meeting in early October and meet monthly. She said it will report to the board around January. She promised it will be a very open process, which will include at least one community meeting to obtain the public’s ideas on how to make Queen City "the best general aviation facility possible."
The authority recently decided not to attempt to sell all or part of Queen City to help pay off its own $16 million legal obligation.
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