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Amid Industry Troubles, A New Airline Starts Up

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THE Greater New York area's first new regularly scheduled airline in almost a decade was launched this week amid lots of media hoopla but not too many paying customers.

If Kiwi International Air Lines can stay financially afloat in the competitive airline industry, other regional carriers may also start up, some airline specialists say. Such a result would be beneficial to travelers in general by putting downward pressure on existing fares.

Kiwi flies out of Newark International Airport, which, like John F. Kennedy and LaGuardia airports, is operated by the Port Authority of New York and New Jersey; Newark is also the newest and perhaps most modern of the region's three airports.

The new airline is a welcome addition from the Port Authority's viewpoint since Continental Airlines, the main carrier out of Newark, has been struggling for some years. Continental, which filed for bankruptcy in December 1990, is being considered as a possible partner by Air Canada and Lufthansa Airlines. The Scandinavian Airlines System already has a $100 million, 16.8 percent stake in Continental.

Newark's new airline is owned by its employees, who are mainly former flight personnel from Eastern, Pan Am, and Midway Airlines. Kiwi has an initial capitalization of between $7 million and $11 million, 219 employees and two aircraft - Boeing 727-200s once owned by Lufthansa.

"We're on our way," says Kiwi spokesman Rob Kulat. Though only about 50 passengers filled Kiwi's maiden flights earlier this week, "our telephone lines are now flooded with calls inquiring about our service."

The company believes it can bring in revenues of $48 million its first year, based on selling only 350,000 seats, which would be less than 7 percent of the seats in its particular markets.

The last major carrier to offer new service in the Greater New York region was People's Express, which provided low-cost, no-frills service to business travelers and vacationers. But the carrier was finally squeezed out of business in the mid-1980s, unable to compete with the larger, established airlines.

Since then a number of prominent airlines - including Eastern and Pan Am - have also fallen victim to high fuel and labor costs, as well as the intense price-slashing that goes on within the industry. Meantime, a number of other major airlines, including Continental and TWA, are either in bankruptcy proceedings or considered to be in extremely difficult financial circumstances.


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