1994-1997
In 1984 a group of businessmen from Columbia formed an airline named Air South (not to be confused with other Air South that had operated in the past). But it would be 10 years before the first flight took to the air and on 23 August 1994 services were inaugurated between Atlanta and Miami and between Atlanta and St Petersburg, Florida. The aircraft of choice was the B737-200. The route network grew rapidly and service was started to Jacksonville, Florida, Myrtle Beach, Tampa and Raleigh-Durham. By 1995 seven Boeing 737-200s were operating.
Although the airline was headquartered in Columbia, the main operations base was Atlanta. Air South's financial situation was never very strong and by 1996 the network was reduced. Flight delays and cancellations became a major problem with very dissatisfied passengers as a result. A marketing alliance was set up with Kiwi International Airlines but by that time both companies were having financial problems. By the summer of 1997 Air South's fleet was reduced to five B737-200s. The end came swiftly at the end of the 1997 summer when Air South went into Chapter 11 Bankruptcy in August 1997 and it shut down one month later.
The later Air South (IATA: WV, ICAO: KKB, and Call sign: Khaki Blue) was a low-cost, high frequency, short haul airline based at Columbia Metropolitan Airport serving Columbia, South Carolina and the Southeastern United States as far south as Miami and as far north as Baltimore. It operated from 1994 to 1997 using seven Boeing 737-200 aircraft to initially offer low cost, high frequency jet service, to smaller local markets rarely served with jet aircraft, using where possible, alternative airports such as St Petersburg. It had planned to operate to the alternative Orlando-Sanford airport (Orlando) and Fort Lauderdale Airport (Miami) and did operate for a short period to Baltimore (Washington). Later, new management canceled this low cost Southwest Airlines style strategy, and many of those markets, choosing instead to serve high cost more markets with low frequency service to New York (JFK and Newark) and Chicago, and to compete with the major airlines. This was a financial disaster which drove up the low seat mile costs at its first operating year end (8.5 cents) to as a high as 13 cents in 1997.
The first startup airline partially financed by South Carolina, Air South also boasted initial equity investment from its founders and directors, and local citizens. It had the support of South Carolina Governor Carroll A. Campbell, Jr. and Columbia mayor Bob Coble. As a condition of its low cost state loans, it hired several hundred local staff in Columbia, a highly successful project.
Unlike some startup airlines, it also supported the travel agent distribution system and was listed in all Global Distribution Systems . The basic strategy, aircraft type and seating, in-flight service and philosophy mirrored that of Southwest Airlines, not then operating in the region. Its initial plan was to operate through its base at Columbia to:
Jacksonville, Florida; Miami, Florida; St. Petersburg, Florida; Tallahassee, Florida; Tampa, Florida; Atlanta, Georgia; Raleigh-Durham, North Carolina; Myrtle Beach, South Carolina; Norfolk, Virginia; Baltimore, Maryland
And then, as additional aircraft became available to add Jackson (Miss), Mobile (Ala), Birmingham (Ala), Nashville (Tenn), New Orleans and similar cities in the Southeast USA
The airline's experiment of seeking debt financing from the state and local governments was strongly criticized by a very negative local press, a most unusual reaction when an airline increases air service to a market. This, even after its first profitable month occurred in its first year of operations, something not even achieved by Southwest Airlines during its startup. This drumbeat of negative news in turn heavily impacted local confidence in using its service.
After a promising start, the new management change in strategy to focus on longer haul travel to major cities in the Mid West and Northeast, resulted in many flight delays and cancellations on the heavily competitive routes to New York and Chicago where winter weather always impacts flight operations. At one point it had to contract Viscount Airlines, a charter operator with scheduled authority, to cover some of its flights. Its ability to obtain additional aircraft to reduce unit costs was then also impacted. While the state debt service costs were reasonable, conditions were onerous, severely restricting its operational flexibility. Following the Valujet accident in Florida in 1996 startup carriers had many operational restrictions imposed on them by the FAA resulting in further increasing unit costs. This resulted in the failure of many airlines and even the merger of the highly successful Valujet itself.
Air South ceased operations on August 28, 1997 having lost $60 million, including $12 million debt financing from the state of South Carolina and some $1.5 million each from the City of Columbia and counties, and the equity investments of its founders, local investors and employees, and the professional investors who followed.
Southwest Airlines shortly afterwards started operations in, and to most of the Florida cities in the original Air South plan and adding most other routes over time, with the exception of Atlanta and Columbia itself. They have since reported that this was the one of their most successful service starts to a new region.
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