Tahoe Air suspends operations | TahoeDailyTribune.com

Tahoe Air suspends operations

The one who pays the piper calls the tunes. But the song selected by Tahoe Air investor Capital Bay Securities left no one dancing.

“On Friday we decided to suspend operations indefinitely,” said Tahoe Air Chief Executive Officer Bruce Wetsel. “We’re not dissolving the company. We’re not filing for bankruptcy.”

Nevertheless, all but four employees received lay-off notices over the weekend. The reservations office in Stateline is shut tight and deserted and equipment at the Lake Tahoe Airport has been sold.

The flurry of inactivity is the culmination of several weeks of hard luck for the fledgling airline that took off for the first time in June.

Tahoe Air has been working to get FAA 121 certification to fly on its own. To get in the air while waiting, Tahoe Air contracted with other carriers to serve Lake Tahoe. A rocky relationship with Casino Express out of Elko, Nev. – which is not related to Tahoe Casino Express bus service – recently ended. Tahoe Air suspended flights while waiting for the U.S. Department of Transportation to approve a new relationship with Lorair out of Tucson, Ariz. It’s been a long wait and flights have taken off only one weekend in about a month.

Recently, Tahoe Air officials have approached the casinos and large lodging operations for financial help.

In the meantime, the patience of Tahoe Air’s investment supporters ran out.

“The investors (Capital Bay Securities) are frustrated. They’ve invested $5 million and are willing to step up with another $2.5 million but they want to see some of these things in place before they step up to the plate,” Wetsel said.

“All the pieces were not coming together fast enough. We’re re-evaluating the situation and looking at a longer-term plan.”

According to South Lake Tahoe Mayor Judy Brown, the trouble with Tahoe Air will not stop the hiring of a new airport director. Richard Jenkins is scheduled to begin work at the Lake Tahoe Airport on Nov. 29.

“If we’re going to be able to attract an airline and keep it, we need a strong direction,” she said. “I hope my fellow counselors agree.”

Brown said she was hopeful that Tahoe Air will be able to reorganize and get back in the air. It’s also possible that Allegiant Air will come back, she said.

“I know (Tahoe Air) is working with Lorair to get reorganized and to be able to come back. I don’t think they’ll be able to come back as Tahoe Air. I’m discouraged, but I still think they’ll be able to come back.”

For now, Tahoe Air is just trying to survive.

Only four administrative people are left in the Tahoe Air offices, including Wetsel. Tahoe Air founder and major shareholder Mark Sando, is not one of the four.

Sando is not happy with the new tune. The decision to shut down and lay off employees was made last week without his input.

“I was out of town and not consulted on that decision whatsoever,” Sando said Monday afternoon. “It was driven by the investors.”

Sando has a song of his own to sing.

“We kept certain protections (in the contract),” Sando said. “It’s something you don’t want to lean on, but it’s sometimes necessary for the good of the company and the community.

“For 3 1/2 years (since developing the idea for Tahoe Air) my purpose has never changed. There’ve been ups and downs but the commitment has never changed.”

None of the primary players want Tahoe Air’s music to stop.

“There is a market here. It’s just finding the right deal to make it work,” Wetsel said. “This should not be an indictment of air service at Lake Tahoe. As an aviation professional, I was encouraged by the numbers we were starting to see.”

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