Other Free Encyclopedias » Company History » Airlines & Air Transport

Arrow Air Holdings Corporation Business Information, Profile, and History

company million cargo airline

200 N.W. 62 Avenue, Building 711
P.O. Box 523726
Miami, Florida 33152
U.S.A.

Company Perspectives:

Mission: to provide a safe, reliable, and profitable air freight transportation system that meets the changing needs of its customers with courteous and efficient service; to provide a growth oriented workplace that recognizes the interests, rights, and ideas of its employees and offers career advancement opportunities; and to provide a corporate environment that encourages ethical behavior and compliance with all regulations and laws.

History of Arrow Air Holdings Corporation

Arrow Air Holdings Corporation owns Arrow Air, Inc., which is the fourth largest cargo airline in the United States and is based at Miami International Airport. Clientele includes freight forwarders, the United States Postal Service, and the U.S. Department of Defense, although the company stopped flying military personnel in the mid-1980s. Arrow dominates the air cargo market between the United States and Latin America and the Caribbean. The carrier operates 135 flights a week to 29 destinations in the region and has a hub in San Juan, Puerto Rico. Arrow carries nearly 150,000 tons of freight a year.

California Origins

Arrow Air founder George Batchelor was born of Native American ancestry in Shawnee, Oklahoma in 1901. He became a pilot, and the loss of his first wife and son in a plane crash did not stop him from moving to Compton, California, in 1947 and establishing Arrow Air.

Batchelor's aircraft brokering business was more lucrative than this secondary airline, reported the Miami Herald. In his first deal, Batchelor bought a DC-3 in Hawaii for $10,000 and resold it for a $15,000 profit. The airline stopped scheduled operations in 1953 in what Batchelor saw as an anti-competitive regulatory environment. However, Batchelor continued leasing aircraft, often with crews, to other small airlines.

Batchelor moved Arrow Air to South Florida in 1964. By this time, he was with his third wife. Considered a pioneer in both south Florida's aviation industry and in the Latin American air cargo market, Batchelor would amass a considerable fortune and donate much of it to homeless and children's causes before dying in July 2002.

Relaunched in 1981

On May 26, 1981, Arrow Air relaunched as a charter airline under Miami's Batchelor Enterprises, whose aviation operations included fixed-base operator (FBO) Batch Air and International Air Leases, Inc., Arrow's parent company. (Batch Air eventually became owned by an employee group and was sold to Greenwich Air in 1987 for more than $30 million.) Arrow added scheduled services in April 1982, beginning with California-Montego Bay.

Low fares were causing the company to lose money. In October 1984, it canceled several routes, including Tampa-London. At the same time, the company reoriented its route structure from an east-west alignment to a north-south one, reported Aviation Week & Space Technology. San José, Puerto Rico, where the company was building a new hub, was the center of the scheduled network, and by the end of 1985 Arrow Air was connecting the destination with Montreal, New York, Philadelphia, Boston, Baltimore, Orlando, and Miami. In 1985, more than one million people flew Arrow to 245 destinations in 72 countries.

Arrow was operating McDonnell Douglas DC-10 and DC-8 aircraft. Like other start-ups, Arrow contracted some functions to other airlines. United Airlines trained its crews in Denver, and Florida Air supplemented Batch-Air's maintenance work.

The company was approved for military charters in 1984, and in October 1985 won a $13.8 million contract with the Department of Defense. This accounted for only a small segment of Arrow's revenues. Most of its business came from scheduled service from Canada and the East Coast to Puerto Rico and Mexico. Commercial charters accounted for another 20 percent or so.

In carrying out its military flights, the airline experienced a large-scale disaster and its first fatal accident. On December 12, 1985, one of the company's DC-8s crashed after takeoff in Gander, Newfoundland, killing 248 soldiers of the 101st Airborne Division and eight of Arrow's flight crew personnel. The flight had originated in Cairo and had taken on fuel in Gander after stopping in Cologne, West Germany. The accident resulted in a great deal of unfavorable media coverage and government scrutiny for the airline. Arrow filed for Chapter 11 bankruptcy reorganization in February 1986, laying off 400 employees. However, operations continued.

Haberly Leads a Turnaround: 1987-94

Named president of Arrow Air in 1987, Richard L. Haberly is credited with turning the company around. (Arrow attained profitability in 1990.) Haberly had begun his aviation career loading baggage for United Airlines, later entering the company's management-training program. He also spent ten years with the Flying Tiger cargo airline.

Arrow's wet lease business--the practice of hiring out planes complete with crews and fuel--began to pick up again. In 1989, Arrow began leasing a DC-8 to Lot Polish Airlines for a Warsaw-New York-Chicago route. It also provided a plane to the Airline of the Marshall Islands. In early 1991, Arrow was again carrying U.S. troops, this time for the military buildup preceding the war in the Persian Gulf.

Arrow boasted a 98 percent on-time rate and a high degree of customer loyalty. Rates for Latin American cargo fell 15 percent in the early 1990s as U.S. passenger airlines United and American paid increased attention to that market. After a few profitable years, Arrow posted losses in 1992 and 1993. Richard Haberly was succeeded as Arrow president in June 1994 by Jonathan D. Batchelor, son of chairman and company founder George Batchelor. Haberly left to take over the ailing cargo airline Florida West.

In the mid-1990s, Arrow's fleet numbered 18 aircraft--DC-8's and Boeing 727's (two of which were configured for passengers). Many of the planes were acquired from bankrupt Eastern Airlines. The company dropped the 727's and began leasing Lockheed L-1011 widebody jets in 1996, when its fleet numbered just nine planes. By this time, charters for other airlines were accounting for half of Arrow's business.

Grounded in 1995

Market conditions were not Arrow's only worries. The FAA grounded Arrow in March 1995, charging the carrier had improperly documented maintenance. A company spokesman countered that the grounding was unfair and was related simply to the FAA's request that Arrow print out a hard copy of its fleet records, which were stored electronically. Company officials blamed the affair on a disgruntled employee who had been fired for theft.

Arrow contracted other carriers to handle its business during the crisis. British Airways, for example, handled the route between Columbus, Ohio, and Glasgow, Scotland. Arrow also laid off 368 of its 587 employees. During the shutdown, Arrow lost $3.5 million, plus another $1.5 million in FAA fines.

The FAA allowed the company to begin flying cargo again in June 1995. Soon, Arrow was carrying more international freight at Miami International than any other carrier. It was connecting San Juan to the Northeast via Hartford, Connecticut; to the Midwest via Columbus, Ohio; and to the Southeast via Atlanta.

A restructuring in June 1996 placed Terence Fensome as president and CEO of Arrow Air. Jonathan Batchelor soon took over again as president, but in July 1998 relinquished that role for the positions of chairman and CEO as Guillermo J. "Willy" Cabeza became president and chief operating officer. Cabeza had been vice-president of operations at Arrow.

Arrow failed to profit from the upswing in the economy in 1997. It lost $15.1 million for the year on revenues of $88.3 million. The company had posted losses of $11.3 million in 1996 on revenues of $61.1 million.

Arrow started a new weekly service from Houston to Peru and Ecuador in February 1998. Houston was billing itself as a "Gateway to Latin America" to compete with Miami, which handled 85 percent of cargo traffic to the region. Arrow revenues were $87 million in fiscal 1998.

A Merger and a Bankruptcy: 1999-2000

After a few difficult years, Arrow was acquired by Fine Air Services in early 1999 (the deal was finalized in April) from International Air Leases Inc. for $115 million. Frank and Barry Fine, owners of Fine Air, planned to keep Arrow's brand name viable and continued to emphasize scheduled, rather than charter, cargo service. Included in the purchase were 13 DC-8 aircraft, four L-1011's, 130 jet engines, and spare parts. The buy gave Arrow access to Fine's 133,000-square-foot refrigerated distribution facility for handling perishables, which made up the bulk of Latin American cargo.

Unfortunately, Fine Air had its own set of woes resulting from a fatal crash of one of its DC-8's in August 1997. This scuttled Fine's planned $123 million initial public offering. Rising fuel costs, a downturn in the Latin American market, and debt left over from its Arrow Air acquisition combined to make the airline unflyable. Fine lost $108 million in 2000 on revenues of $152 million, and another $36 million on 2001 revenues of $148 million.

The company filed for bankruptcy on September 27, 2000, and subsequently merged with Arrow Air, Inc., leaving behind the Fine Air Services name. The Fine brothers would no longer control the company. It emerged from Chapter 11 in May 2002 as a unit of Arrow Air Holdings Corp., a Greenwich, Connecticut, investment group led by Dort Cameron. Richard L. Haberly returned to rebuild the airline.

Revenues were $148 million in 2001, when Arrow had about 800 employees in Miami and another 200 in other locations. The fleet had grown to 16 DC-8's and two L-1011's; the carrier had also begun leasing a pair of DC-10's.

Haberly Returns in 2002

Former Arrow president Richard Haberly returned to the company after restoring Florida West to profitability. Haberly, noted as a turnaround specialist, had his work cut out for him. The new Arrow was losing $3 million a month, reported Traffic World in early 2002, yet Haberly aimed to have it breaking even by year-end.

The withdrawal of Grupo TACA's freighters from the market provided Haberly with an opportunity to expand services in Central America with some east-west routes. He also aimed Arrow to re-enter the charter business and to diversify geographically via partnerships with airlines such as Atlas Air, Lloyd Aeroeo Boliviano, and Air Global International (AGI). AGI had been formed in 2001 and leased two Boeing 747's to carry cargo to South America. Its routes complemented those of Arrow Air, which acquired AGI in March 2002, keeping its brand name active and its CEO Frank Visconti in place. Operationally, Arrow Air planned to retire its L-1011 by 2003 and replace its dozen DC-8's with Boeing 767's a few years after.

Principal Subsidiaries: Arrow Air Inc.

Principal Competitors: Amerijet International; Challenge Air Cargo Inc.; Federal Express Corporation; United Parcel Service; Varig Brazilian Airlines.

Chronology

  • Key Dates:
  • 1947: Arrow Air is launched.
  • 1953: Passenger operations are terminated.
  • 1981: Arrow Air reestablishes passenger operations.
  • 1985: A military charter flight crashes in Greenland, taking 256 lives.
  • 1999: Fine Air Services acquires Arrow Air.
  • 2002: Fine Air emerges from bankruptcy as a subsidiary of Arrow Air; AGI is acquired.
As Estonian Air Business Information, Profile, and History [next] [back] Amr Corporation Business Information, Profile, and History

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or


This web site and associated pages are not associated with, endorsed by, or sponsored by Arrow Air Holdings Corporation and has no official or unofficial affiliation with Arrow Air Holdings Corporation.