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Up in the air: settlement appears at hand in controversy between Jonesboro and airline.

Both sides in the Jonesboro Municipal Airport-Lone Star Airlines controversy expect to see a resolution to the conflict sometime this month.

To what extent the controversy will be resolved is anyone's guess, since it centers around something the nation's airlines seem to be in short supply of: money.

Lone Star, Jonesboro's only airline, owes the city roughly $3,000 in rent for leased space at the Jonesboro Municipal Airport terminal. Charged $467 a month for the space, Lone Star has failed to pay rent to the city for the past six months, according to airport commissioner Bob Troutt.

In an attempt to collect, the city's airport commission has threatened to evict the airline unless it receives some sort of payment from the Fort Worth, Texas-based operation.

Lone Star, which receives $280,000 annually in federal subsidies for serving Jonesboro thanks to the Essential Air Service Act, services Mountain Home, Harrison, Hot Springs, El Dorado and Magnolia as well. It also once serviced both Texarkana and Camden, but has withdrawn from both locations in the past 12 months due to dwindling bookings.

Rent owed to the city of Camden by Lone Star led to a lawsuit, filed in February 1991, with the city seeking $23,617.89. A judgement was reached two months later -- the city was awarded the entire amount including court costs, although it had received only $8,000 as of July 2. Lone Star ceased servicing the Camden Municipal Airport last month.

Some of the airports using Lone Star indicate they have had similar problems in getting back payments. The city of Hot Springs, for example, has approached the airline about the $12,000 it owes on six months' rent for office and airstrip space, although city officials anticipate no difficulty in acquiring the payment.

Meanwhile, Jonesboro airport commission members await word from Lone Star as to when they can expect payment on the back rent.

"They have been delinquent off and on ever since they came here," says Troutt. "I'd be willing to work with this airline but I hate every month to see them on our delinquent list. It's a fact of life -- you pay your bills."

Fare Wars

A Lone Star spokesman attributed the airline's tardiness to the recent rash of cutbacks in fares by the nation's major airlines.

Those airlines rely on smaller operations like Lone Star to make connecting flights for customers, according to Ed Tavender, Lone Star's director of marketing.

The decrease in air fares has led to an increase in the airlines' work load, Tavender says, putting them behind in their payments to the smaller lines.

"We've had to wait longer to get our receivables, for one thing," says Tavender, saying the major lines are between 30-60 days behind in payments for joint-fare tickets. "Everybody is in a bind."

Tavender adds, however, he expects to see the Jonesboro problem resolved to everyone's satisfaction sometime this month.

"I think (Troutt's) assumption is correct. It should be ironed out by the end of the month," says Tavender.

Lone Star's federal subsidy payments are based on the number of takeoffs and landings, or sorties, at the Jonesboro airport. Lone Star appealed to the Federal Aviation Administration to discontinue its service between Jonesboro and Memphis, on which the subsidies are based, but the appeal was denied.

Lone Star says even with the federal subsidy the airline is losing money on the Jonesboro-Memphis route, since most travelers find it cheaper to drive to Memphis. A shuttle bus trip from Jonesboro to Memphis and back, according to Troutt, costs $50, slightly more than a one-way flight.

Lone Star's contract with the Department of Transportation is based on a projected average of 130 passengers a month. In the first quarter of 1992, Lone Star averaged 39 passengers a month.

"That 100-passenger difference is a deficit," says Tavender. "We won't make any money until we can exceed the Department of Transportation's projection, and that's with the subsidy."
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Title Annotation:Jonesboro Municipal Airport; Lone Star Airlines
Author:Taylor, Tim
Publication:Arkansas Business
Date:Aug 10, 1992
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