Fired pilots and Flight Options settle lawsuit

 - October 8, 2007, 10:17 AM

A lawsuit in which four former Raytheon Travel Air pilots alleged they were fired because of their union-organizing activities when the company merged with Flight Options in March 2002 was resolved early last month, just days before the case was scheduled to go to trial in Cleveland.

Representatives of the litigants said they were not at liberty to discuss details of the resolution, other than to say that the issues in dispute were resolved “to the satisfaction of the parties involved.” The International Brotherhood of Teamsters reportedly provided the pilots with legal representation in the lawsuit, so the fired pilots did not incur attorneys’ fees to pursue the litigation.

The case was an outgrowth of unionization efforts by Raytheon Travel Air pilots before the merger. A majority of the pilots there were apparently headed toward a pro-union vote, but instead voted it down on the eve of the merger in early 2002 largely because of a plea from then Flight Options chairman and CEO Kenn Ricci.

Raytheon said in a statement to its pilots at the time: “We would like to thank you for your support and we look forward to putting the union issues behind us and working with each of you into the future.” A Raytheon spokesman told AIN then that the outcome of the vote was “good news for [RTA] and expressed confidence in RTA leadership” and the consummation of the merger with Flight Options (AIN, March 2002, page 3).

Change Is in the Wind

Meanwhile, Cleveland-based Flight Options is in the midst of changing the tail numbers of its 220-strong aircraft fleet to end with the suffix “LX,” for luxury service. This livery change is being undertaken “to provide uniformity and direct connection to our corporate identification,” said chairman and CEO John Nahill.
The “LX” designation will replace “CW” (for Corporate Wings, the predecessor to Flight Options) on aircraft in Flight Options’ original fleet when the fractional company was founded in 1998, and “TA” on the tails of the aircraft inherited from Raytheon Travel Air when the two operators merged.

The company is also continuing its progress toward becoming an all-Part 135 operation. By next February 17 all fractional operators must be certified under either Part 91 Subpart K or Part 135. Flight Options has elected to adhere to the standards of Part 135 because it is not only “most beneficial to our [2,300] owners, but is also most beneficial to us operationally,” Nahill said.

It is a year this month since Raytheon acquired a 65-percent interest in Flight Options, the second-largest fractional operator after NetJets. That transaction in June last year included investing in Flight Options additional capital on an “as-needed basis” over the next 18 months (that is, until the end of this year) and provide secured aircraft and retail financing over the next three years, ending in June 2006.

Reporting on Flight Options’ financials in the first quarter of this year compared with the same period last year, Raytheon said the company’s profit and loss performance “year over year was better. Cash flow and income were very close to target, although revenue was down a bit.”