Hello from bizjournals.com! David Mueller (kawika42@mac.com) thought you might like the following article from The Business Journal: http://www.bizjournals.com/industries/travel/airlines_airports/2002/06/10/kansascity_story3.html Vanguard turns to private sector to land a loan Brian Cookson Staff Writer ------------------------------------------------------------ After officially being denied federal loan guarantees, Vanguard Airlines Inc. probably will have to rely on help from private investors to boost the airline. Industry watchers, however, said Vanguard won't have much more luck with private investors than it did with the Air Transportation Stabilization Board. "The skies are not friendly right now for Vanguard," said Tom Parsons, CEO of Bestfares.com in Arlington, Texas. On May 28, the ATSB denied Vanguard (OTCBB: VGDA) $13.5 million in loan guarantees. The airline applied for $60 million in guarantees in December but reduced that number at least twice as negotiations with the board continued for almost six months. Vanguard has indicated that the loan applications were crucial to its survival and that it isn't giving up on its quest for cash. In a release issued in response to the application denial, Vanguard said it planned to refile its application but would not comment on any changes. The deadline for all applications is June 28. The airline also indicated that the chances were improving for it getting a private, non-federally backed loan. "We have seen more interest since right after Sept. 11," Vanguard spokesman Alan Carr said. However, Michael Allen, chief operating officer of BACK Aviation Solutions, a consulting firm based in New Haven, Conn., said Vanguard will have a tough time persuading a lender to invest. One issue, Allen said, is that Vanguard never has been profitable, even when times for the industry were better. Parsons said investment capital is available but only for the strongest airlines. "There may be money out there," he said, "but it's for people who (investors) believe have strong potential." Vanguard has at least one backer with a bully pulpit. U.S. Sen. Christopher "Kit" Bond, R-Mo., expressed his disappointment with the ATSB and his support for Vanguard on the Senate floor. "The airline was growing rapidly and consistently prior to Sept. 11," Bond told senators June 4. "The airline is trying to get back on its feet." Vanguard officials said the airline has strong potential. The carrier continues to add flights, increasing capacity by 50 percent during the past three months. Vanguard's revenue and losses also improved in the first quarter. Revenue was $34 million, compared with $26.5 million in last year's first quarter. Vanguard had a loss of $7.96 million in the quarter, compared with $11.49 million the year before. On May 23, Vanguard announced a one-for-five reverse stock split, which will allow the airline to issue more shares to raise capital. It also announced $1.5 million in new financing that day. "We feel like we're doing things that make us more attractive," Carr said. Copyright(c) American City Business Journals Inc. All rights reserved. You can view this article on the web at: http://www.bizjournals.com/industries/travel/airlines_airports/2002/06/10/kansascity_story3.html