PBA was an airline in disgrace. Peter Van Arsdale had two weeks to save it. He did. Then the next disaster struck.
Looking through the window of his brother's office, Peter Van Arsdale could see the reporters across the old airport road, milling about in the harsh Florida sun, CBS and ABC, minicams and instant eyes, a whole pack of them, swarming at the scent of disaster. That noon, Saturday, November 10, 1984, Federal Aviation Administration officials had delivered an "emergency order of revocation" to the Naples headquarters of Provincetown-Boston Airline Inc. (PBA), America's largest commuter carrier, and already the reporters were out in force. Peter could hear them outside, shouting their questions through the closed door, baying for blood.
And blood there was. Peter's older brother John, chairman and chief executive officer of the company their father had founded 35 years ago, was disgraced, stripped of his pilot's certificate, and accused by the FAA of "reckless" flying that "endangered the lives" of passengers and crew. Vice-president of operations John Zate, a 24-year PBA veteran and member of the board, was gone too; Zate was accused of certifying a pilot on PBA's DC-3 without giving her a flight test, and of multiple "fraudulent or intentionally false statements" on official flight-test records. The chief pilot, the assistant chief pilot, and the three pilots with management rank had all lost flight status, likewise accused of faking flight test records. The FAA also cited the airline for more than 160 violations of training regulations, including 136 specific cases of flight attendants serving as crew members when their requirements for "recurrent training" had not been met. In addition, the FAA listed no fewer than 6 violations relating to aircraft inspection and maintenance, including "exceeding [the] time limit for required inspection" and "use of unauthorized personnel to perform maintenance."
An emergency order of revocation is the most severe action the agency can take. Four thousand passengers traveling on PBA's more than 600 daily flights were stranded, 103 planes grounded, dozens of cities left partly or wholly without air service. And 1,500 PBA employees were suddenly out of work. Peter's first thought, sitting there in the beleaguered corporate headquarters, was that the airline would go broke. Air Illinois, faced with a similar crisis 11 months earlier, had dissolved. Air Vermont lost its certificate in January 1984, and had lurched along under the protection of the federal bankruptcy courts for months. PBA, Peter knew, paid out $5 million to $6 million each month in bills and debt service. Without a certificate, it was technically no longer even an airline, and thus was already in default on its loans.
Even before the latest disaster, 1984 had been a turbulent year for the Van Arsdales. In July, after more than 30 years of safe flying, PBA had suffered its first crash: A Cessna pilot flying an unscheduled trip from Provincetown, Mass., to Boston undershot his approach, plunging into the harbor and killing his wife, the sole passenger. In September, another Cessna pilot lost power just off the Naples runway and crashed into the nearby woods, killing one passenger. The National Transportation Safety Board (NTSB) would later report that a ground-crew member had accidentally filled the Cessna with the wrong fuel.
Still, neither tragedy -- nor the growing numbers of complaints about schedule delays, rude personnel, and lost luggage -- seemed to slow PBA down. The airline had been on a fast track ever since the brothers took over from their father in 1980, and 1984 was a financial record breaker. By the end of the first three quarters, PBA had recorded $58.4 million in revenues, up 41% from the $41.4 million registered the entire previous year. Profits climbed as well, up to $3.3 million over nine months, 43% more than all of 1983's. "Johno," 40, ran the company like a fiefdom, dazzling both competitors and Wall Street with his aggressive style. In October, he bought Marco Island Airways, another Florida commuter, and added the Bahamas to his swelling list of stations. He had $20 million worth of new planes on order and a $15-million private placement in the works. For the whole year the Van Arsdales were expecting to board close to 1.5 million passengers, a record for a commuter airline. In 1985, John predicted, the figure would approach 2 million.
With November's decertification, however, John's plans lay in ruin. The issue became survival.
Peter and the board, or what was left of it, met that afternoon in John's old office, behind closed doors, to consider their grim alternatives. File for Chapter 11? That would protect them from their creditors, but it could mean turning control over to a court-appointed trustee and trying to run the airline COD. Appeal? That would take 60 to 90 days. "Besides," Peter asked, "what the hell is there to appeal?" Sell? Liquidate? John had wanted to play the political card, hoping that such influential regular passengers as Sen. Edward M. Kennedy or Massachusetts Congressman Gerry Studds could sway the federal government. But Peter thought that was unrealistic: "No politician is going to oppose safety in the air."
Instead, the board agreed, there was only one course for survival: Win a new certificate, and with it the right to fly again. Before competitors took their market share. Before the money ran out. They would have to replace their discredited executives, submit a new management team to the FAA, then rebuild the airline from scratch, winning agency approval for each step. All their manuals would have to be rewritten, each plane reinspected, each crew member retrained and retested. By the book.
It might have been better, Peter reflected, if he had been the one forced out. The airline had been John's life, a 24-hour-a-day, seven-day-a-week obsession; he would have reveled in the challenge. Peter had had other plans. He had just gotten married again, and had bought a new boat, Slick, a 42-foot racer. So far he had only been able to sail it once.
"There were times, during that meeting, when I wondered if I hadn't gotten the short end of the stick," Peter remembered. "I've always sort of worked in John's shadow. I was temperamentally suited for it. There are times you reflect how nice it would be to get home in daylight hours and see the kids, and I knew I wouldn't be able to do that for a while."
