News Column

California Pacific Airlines Plans Take Wing By Early 2012

June 6, 2011

Bradley J. Fikes

Airplane

California Pacific Airlines, a startup based at McClellan-Palomar Airport, plans to begin flying by early next year, said founder and longtime North County entrepreneur Ted Vallas.

The company had originally planned to begin flying as early as last November. However, delays in getting required approvals from the Federal Aviation Administration have pushed back the start date, Vallas said.

Once the approval is granted, the airline will be ready to go, Vallas said.

Initially, the company would fly between Carlsbad and five cities: Sacramento, San Jose, Oakland, Las Vegas and Phoenix. A short time later, it plans to offer weekend flights to Cabo San Lucas, Mexico, at the tip of Baja California.

Vallas said the company is meant to offer the region's residents a more convenient option to Lindbergh Field in downtown San Diego and to serve popular destinations.

In a career spanning more than 60 years, Vallas, 90, has developed golf courses, resorts and other businesses. He operated San Diego-based Air Resorts Airlines from 1980 to 1997. Vallas was co-founder and president of General Design and Instrumentation Company (Scanivalve), a wind tunnel and instrumentation company.

California Pacific has raised $14 million so far, Vallas said, all of it his money. The company will raise an additional $32 million in a private placement with other investors. In the next step, another $32 million will be raised for a total investment of $78 million.

"But we're not taking any money until we get beyond this first stage with the FAA," Vallas said. Once that hurdle is cleared, "there's no roadblocks."

The delay is no worse than usual for government agencies, Vallas said.

California Pacific Airlines will start flying with three Brazilian-built Embraer 170 jets, Vallas said, after the aircraft are inspected and certified. The Embraer is a 70-passenger, twin-engine aircraft.

The company has about 22 employees at present, Vallas said. Initially, the company will bring up the total to 101, and eventually to about 400 to 500. The core team has long been in place.

"We have to have all the key people on the payroll all the time," he said. "We've had 'em on there for two years."

The company's concept is a good one, consultant Brett Snyder wrote in April 2010 in the airline blog The Cranky Flier. Snyder called the company "certainly one of the more promising startups I've profiled here."

For one thing, Snyder wrote, there's money behind the company. Secondly, the routes mostly make sense. However, Snyder wrote that Southwest Airlines serves the same U.S. markets, so competition will be tough. To survive, the company will have to cater to business travelers.

"If people want to go to San Diego attractions, they'll fly to San Diego," Snyder wrote. "Legoland is right near the airport in Carlsbad, but nobody flies to San Diego just to go to Legoland. North County is not a destination. It's all about business, so if they can make inroads there, despite their frequency disadvantage, then they might be on to something."

Snyder criticized the airline's initial plan to offer three classes of seats -- first class, business and coach -- as being overly complicated and not likely to add revenue. California Pacific apparently agrees: The company will now offer two classes, business and coach, Vallas said.

"Even the coach class will have much more room than we had proposed at the beginning," Vallas said.

Snyder, reached Friday for an update, said he was a bit more skeptical of California Pacific in light of the delay, although not counting it out. Even the best-funded and backed airline startups have an uphill struggle, he said.

"It's a fairly treacherous process to get started up," Snyder said. "I'll believe it when I see it."

California Pacific Airlines can be reached at www.flycpair.com or 760-707-1730.



Source: Copyright (c) 2011, North County Times, Escondido, Calif.


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