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5 Worst U.S. Airlines of All Time

Stocks in this article: AAL UAL

Air South

In the small Columbia, S.C., office that John Tague occupied as Air South chairman, a door to the tarmac just outside was locked with a wooden board inserted into metal brackets. The walls were cinder blocks, decorated only by three children's drawings. To block out the sound from an air compressor outside, Tague had to close the window.

It was a humble office for a humble airline. Air South was started by an entrepreneur who preferred St. Petersburg, Fla., but located in Columbia because South Carolina offered $17 million in incentives,

By October 1996, when I visited, Air South seemed to have done everything wrong. It has lost $30 million in two years, including the taxpayers' $17 million. Envisioned as a low-cost carrier, its per-mile costs exceeded those at most major carriers. It ran through three CEOs before Tague arrived. It had changed routes with alarming regularity. Its on-time performance has dipped below 50%, while the percentage of scheduled flights that actually took off had dipped below 80%.

Tague, who grew up in the airline business, was considered an industry veteran at 34 years old. "I wouldn't have stepped in the front door if I couldn't be successful," he said. "We think we can create a good, medium-sized company that sticks to its knitting, provides a good place to work and makes a profit."

This did not prove out, despite Tague's best efforts.

Air South began flying in August 1994. The plan was to serve the Southeast, especially Florida, from a Columbia hub, with a fleet of Boeing 737-200s. Eventually, the fleet grew to seven airplanes. Air South filed for bankruptcy protection in August 1997 and liquidated two months later.

"The legacy of Air South will be that you couldn't rely on it and it wasn't on time," Tom Volz, the vice president of marketing who helped found the airline in 1994, told TheState newspaper in a 1997 post-mortem. "We were like the town drunk who, every six months, would promise to sober up and then, inevitably, fall off the wagon."

Among the problems: Columbia simply was not big enough to be an airline hub. Air South tried to cut costs on maintenance, but ended up spending excessive amounts for maintenance back-up, including payments to US Airways to carry its passengers when it couldn't fly. The airline's plan kept changing as the airline ran through five top executives, each of whom spent money to make changes.

"Ultimately, Air South became known for a constant string of delays and cancellations that eroded customer confidence," TheState reported. "That, coupled with skyrocketing costs, made Air South a failure -- and a case study of the risks of investing taxpayer money in a private business."

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