The fledgling: tiny Eastwind Airlines fights for flights, spreading its wings at Piedmont Triad International Airport.

The sole window in Herman Gillis' narrow office looks onto a patch of concrete at Piedmont Triad International Airport. It's a sunny February morning, and Gillis' eyes dart often toward the two green-tailed Boeing 737-200s being moved around outside. At this moment, they comprise Eastwind Airlines Inc.'s entire fleet.

Gillis, the Greensboro-based airline's president, is waiting anxiously for a third plane to taxi into view. The leasing company was supposed to deliver it two weeks ago, and the delay has twisted the airline's schedule - along with its balance sheet - into knots. Whenever the phone rings, he leaps from a conference-table chair at one end of the room to answer it at the other end, about 15 feet away. Eastwind added flights a week earlier, anticipating getting the plane. When it didn't, it had to put some passengers on other carriers. The delay cost it nearly a quarter of a million dollars.

At a start-up airline, little things make big differences. This is the kind of bootstrap operation where the vice president of stations doubles as a flight attendant. Where the president started as the chief pilot. Since Eastwind began flying in August 1995, its employees, who now number 145, have been hustling to make the most of the limited fleet. Turnaround times are fast - 25 minutes at Piedmont Triad. "An airplane is not making any money sitting on the ground," Gillis says. In late March, with three leased 120-seat Boeings (the third finally showed up), the airline was running 12 departures a day from Greensboro to six cities: Trenton, N.J.; Washington, D.C.; Boston; and Fort Lauderdale, Orlando and Tampa, Fla.

But Eastwind still has to scramble for every bit of smooth sky. One Friday in March, one plane was down for scheduled maintenance. Then a Canada goose hit the wing of another in Trenton. "The Florida traffic couldn't get out," Gillis recalls, so Eastwind had to add flights to Florida on Saturday. "I can't control weather," Gillis huffs, "and I can't control birds that fly into airplanes."

Those kind of inevitable foul-ups - or maybe fowl-ups - compounded by competition from bigger, better-established airlines, make any start-up carrier a long shot. Airline consultant Michael Boyd, president of The Boyd Group in Evergreen, Colo., has worked with a slew of wannabes. "There's a lot of tadpoles out there, and very few of them turn into frogs," he says. "They can eat up a lot of a cash." Profit margins are typically just 2% to 3%. Only two of the 43 jet airlines started between 1978, when airline deregulation began, and 1992, have survived, he says.

Eastwind is running true to form. It has bled a lot of red, losing more than $14 million so far. In 1996, its first full year, it lost $5.1 million on $13.0 million in revenue. In 1997, it lost $6.6 million on $17.9 million in revenue. But Eastwind did cut its losses slightly in the second half.

That may be a small sign its strategies are cutting its chances of failure. Its idea is to stay fast, cheap (one-way from Greensboro to Dulles International Airport in Washington starts at $79) and under the radar screens of the major carriers. It moved its headquarters and hub to Greensboro from Trenton in 1996 only after Continental Airlines closed its hub there, in keeping with its notion of staying out of crowded markets and flying to underserved airports.

Still, to make money, it will have to start drawing more passengers. Last year, its planes ran at 36% capacity - low for a low-fare airline. One thing going for it: 737s are relatively inexpensive to operate, so they don't require as full a plane as, say, a DC-9.

To grow and give itself some breathing room, Eastwind has more planes on the way. Its parent company, Haddonfield, N.J.-based UM Holdings Ltd., bought two brand-new 737-700s, slightly bigger at 134 seats, for about $40 million each and will lease them to Eastwind. They are due in before the end of June.

"We don't foresee being the size of United," Gillis says, "but in the next five years we hope to have 20 or 25 airplanes." That depends on the economy and competition. But, he adds, "there are a lot of airports that are not served or not served very well." Among destinations Eastwind is considering: three South Carolina - cities Columbia, Spartanburg and Greenville - and Hartford, Conn.

Slightly built with graying brown, curly hair, Gillis, 43, grew up in Asheville and has flown airplanes since his father treated him to a flying lesson on his 13th birthday. He soloed at 16, got his private license at 17 and his commercial license at 18. He began his flying career after high school, piloting corporate charter planes. He was chief pilot for Schaffer Enterprises, an electrical contractor in Hendersonville.

In 1986, he joined Charlotte-based CCAIR Inc., one of 11 commuter airlines that operate as US Airways Express. In addition to chief pilot, he was vice president of flight operations and director of operations. In 1994, he left to become senior vice president of operations at Winston-Salem-based Worldwide Airlines Services Inc., which operated Leisure Air. By the end of the year, the Federal Aviation Administration had suspended Leisure's license, and the company folded.

Shortly afterward, on a Friday night in May 1995, Gillis got a call from Phillip Beeson, a former Worldwide Airlines executive. He was working with a group launching a low-fare carrier called Eastwind. Was Gillis interested in coming on as chief pilot? He started that Monday.

Eastwind was the brainchild of Jim McNally, a former Price Waterhouse LLP accountant who had specialized in airline bankruptcies. He envisioned a carrier that would operate along the East Coast and got UM Holdings to finance it, with help from an economic-development grant from the state of New Jersey. UM Holdings, a privately held investment company co-owned by John Aglialoro and Joan Carter, has varied interests. It owns a New York City-based company that gives physical exams to executives, a New Jersey-based provider of staffing and services to oil companies, half of Medway, Mass.-based fitness-equipment maker Cybex International Inc. and 40% of a Philadelphia-based drug-research contractor.

Initially, the airline was based in Trenton. The company figured that area was underserved. No major carrier offered service out of Trenton-Mercer County Airport, and Eastwind thought it could draw some passengers from Philadelphia, a half-hour drive away, and New York, just over an hour.

When Gillis joined, though, he started in Winston-Salem. Greensboro was to be one of Eastwind's first destinations, and the airline was applying for its FAA certification in that region. Gillis had worked with the FAA's flight-standards district office in Winston-Salem when he was with the commuter airlines, so Eastwind put him in charge of the process. "I knew the people, and they knew us," he says. "We had office space directly across the hall. If we had documents to send, we could just hand it to them." Eastwind took just 90 days to get certification in August 1995; the process usually takes six to 18 months. The airline's journey through bureaucracy takes up two shelves of a bookcase in Gillis' office.

In November 1996, Eastwind moved its headquarters to Greensboro. It was outgrowing its space in Trenton and wanted to keep its operations together. Its maintenance, which US Airways was handling at the time, was already at Piedmont Triad airport. The market was strong there, too. "We were impressed with the traffic out of Greensboro," says UM Holdings' CFO Art Hicks. Plus, the FAA office there "was much better to work with."

A quick succession of management changes led Gillis to the top job. Shortly after joining, he became vice president of flight operations when Beeson, the man who first contacted Gillis about Eastwind, left for Continental. Then in March 1997, founder McNally, the airline's president, bowed out. "We felt we needed different skills," Hicks explains. McNally was a finance guy, and the investors wanted someone with operations experience. They brought in Jerry Albers, a former Braniff International Airlines executive, on a trial basis. "He didn't fit in well," Hicks says. "Everybody agreed he should move on." When he left in May, Gillis got the job.

He and Deborah McKeever, the vice president of stations, are the publicly visible half of Eastwind's management team, which also includes Tony Frock, vice president of operations, and Phil Coley, vice president of maintenance. McKeever, who spends much of her time in Orlando, where Eastwind has its reservations center, had been vice president of administration at UM Holdings when Gillis, as he puts it, "stole her." She remains an officer there. At an airline that saves money where it can, she's also, at times, a flight attendant. That's on her weekend trips back to New Jersey, where her husband and two young children live. "They make me work if I want to go home," she jokes.

Gillis also commutes. He lives in Tega Cay, S.C., just across the state line from Charlotte, with his wife and 18-year-old son; the couple also has a daughter, 24. Gillis doesn't change residences quickly. He worked in Charlotte for almost eight years before moving his family from Asheville. Though he still flies for fun, he doesn't pilot Eastwind flights.

The unmarked white door to Eastwind's offices at Piedmont Triad airport is nearly hidden behind a busy, glassed-in display of conference-room furniture on the terminal's lower level, near the baggage claim. The 5,000 square feet, tightly packed with cubicles, once belonged to Continental. The entrance to the training room still carries a Continental plaque that hasn't been removed for fear of damaging the door.

Most passengers would never know Eastwind was there. Its public face at Piedmont Triad is limited to its ticket counters and, in the north concourse, Gates 22 and 23 - formerly Continental's. Eastwind did little to promote itself its first two-anda-half years while it struggled to get on firm footing. "I've heard people who found out about us call us the best-kept secret in town," McKeever says. Eastwind's main claim to fame so far is that one of its pilots, en route from Trenton to Boston, called in the first eyewitness report of the 1996 Trans World Airlines crash.

The low profile is a problem when it comes to getting bookings. Travel agents aren't particularly wild about the airline, even though it pays 12% commissions, highest in the business. (Commissions normally run 8% to 10%.) Even so, the low fares mean the commission is small. But more than that, Eastwind is an unknown quantity.

"Some people who travel a lot just don't want to take the chance," says Allyson Buie, a corporate travel consultant with Aladdin Travel & Meeting Planners in Winston-Salem. But Eastwind is a good choice, she says, "if you need to get there fast and cheap and you don't mind no-frills." For instance, she got a call from a client who needed to get to Washington the next day and couldn't find a fare on a major carrier for much less than $600. She was overjoyed with the $79 one-way price she got from Eastwind.

Some passengers prefer Eastwind's full-size jets over the turboprops favored by commuter airlines, thinking they're safer. Eastwind offers other perks, though it has scaled back some. It offers free parking at Trenton-Mercer County Airport. It requires no Saturday stay for its lowest-priced seats - and only a three-day advance reservation (it used to be one-day), as long as those seats aren't sold out. The airline didn't used to charge for changing reservations but recently added a $35 fee. Spending $12,000 in flights gets companies into the Business Travelers Club, which guarantees them lowest fares.

Still, for agents, booking flights with Eastwind can mean an extra call or two. The airline's online reservations system allows agents to look at availability but not to book trips, says Trina Thompson, a supervisor at Greensboro Travel Agency. Then there's the looming possibility of delays. Eastwind is usually cheaper, Thompson says, "but for us it's actually more trouble than it's worth."

Eastwind hopes a higher profile will allay doubts. Some of its efforts are homespun. It will have a competition later this year to name the yellow, shades-sporting, smiling bee that strikes a nonchalant pose on the tails of its planes. (The bug is informally known around Eastwind as Radar.) "We're also putting heavy emphasis on inflight promotions," McKeever says. "We will be talking about ourselves to the passengers." The airline is also making big-time pushes. It advertises on radio and billboards and has started what Gillis calls "a pretty big advertising campaign" in USA Today.

Eastwind is taking more control of its operations, too. It used to farm out what's called "above-the-wing" operations, such as ticket sales, to Continental. "A Continental agent was the one you saw behind the counter," McKeever says. "Now you see an Eastwind agent in every city." It had contracted out its reservations services but that changed when it opened its center in Orlando late last year. It also started handling its own maintenance last year.

The 737-700s UM Holdings has purchased and will lease to Eastwind will come with first-class seats, but those are likely to be switched to coach during the first major overhaul. Eastwind learned the hard way with the 737-200s what happens with first-come-first-serve seating when seats are priced the same but some are comfier. "It's a free-for-all," McKeever says. Adds Gillis, "People were getting to the airport two hours ahead of time so they could be in line for those seats."

Eastwind also learned its lesson about stretching its fleet too thin. Its first year, ghastly weather in the Northeast grounded flights in Trenton and Boston. That cut off service to Orlando. Five planes will allow Eastwind to schedule in some slack time - "so that when we do have a problem," Gillis says, "we will be able to move an airplane quickly enough without having to disrupt the entire airline."

That will help the bottom line, too. The company had expected to make money the first quarter of 1998, but the delay of the third plane kept that from happening. "Our growth mode is really starting now, with more aircraft available," Gillis says.

RELATED ARTICLE: Getting off the ground

On weekends, Norman Wiginton II is a pilot for Trans World Airlines. But on weekdays he follows a different flight plan. He's trying to start his own airline, based at Smith Reynolds Airport in his hometown of Winston-Salem.

Why such a tiny airport? He figures people in northwest North Carolina would prefer not to drive to Greensboro or Charlotte for every flight. Winston-Salem businesses, he point outs, could bring clients from New York into Smith Reynolds, then to downtown in five minutes. He envisions daily flights to New York, Nashville and Atlanta.

For now it's still a dream. Wiginton, 42, spent the last four years researching and fine-tuning a business plan so thick he calls it "the novel." It's his major carry-on item as he flies after investors, which he's been doing since April. He and the man who would become CFO - a North Carolina resident he declines to name because the man owns another business - have financed the project so far.

Wiginton won't say how much they've put in, but he figures he needs at least $7.5 million to get started. If he doesn't get it by the end of August, he'll return the money to investors. If he does, he'll lease two Embraer 145 "regional jets," 50-seaters that will be painted white and royal blue. He hopes to start boarding passengers by spring of 2000.

Fares will be competitive and overhead low, he says. The company would contract out services such as baggage handling but have its own flight and maintenance crews. Wiginton plans to hire 50 people, including retirees to handle ticketing and pilots he hopes will like returning home every night. Though Winston-Salem Select Jet will fly to only five destinations at most, it is just the first in a number of Select Jet franchises Wiginton envisions in various markets.

At Smith Reynolds, it would be a big step up. The only scheduled commercial service there now is US Airways Express' four daily flights. Major carriers with big planes can't book enough passengers even for connecting flights, says Marvin Cassada, the airport manager. To accommodate Select Jet, the airport would have to expand its waiting room and increase security measures such as raising fences.

Wiginton knows the airport well. After getting his bachelor's in industrial design from Appalachian State University in 1981, he spent six years at Smith Reynolds as an air-traffic controller. He learned to fly after he bought an airplane in 1985, then worked for Winston-Salem-based Piedmont Aviation Group as a flight instructor and charter pilot. He joined TWA in 1989.

"I don't think there's another business as complicated as starting an airline," he says. "This is not something you can go to school and learn."

Genie Carr is a Winston-Salem-based free-lance writer.