Hooters chief checks out airline to see if it can fly
By William Glanz
THE WASHINGTON TIMES
Hooters of America Chairman Robert H. Brooks saw an opportunity
when Vanguard Airlines went bust.
The head of the restaurant chain known for its chicken wings and
scantily clad waitresses is in position to buy the bankrupt airline. Mr.
Brooks will decide within two weeks whether to make an offer for budget
carrier Vanguard Airlines, the Kansas City, Mo., company that stopped
flying when it filed for Chapter 11 bankruptcy protection last month.
"He's very upbeat on Vanguard. He's extremely interested and
extremely enthusiastic," said A.J. Block, Mr. Brooks' Atlanta attorney.
Mr. Brooks has started Hooters Air to make court-approved payments
to Vanguard and examine the airline's books so he can decide whether to
buy it outright or invest in the business.
Just what an airline owned by the man who heads Hooters would look
like remains to be seen.
"There's a lot of speculation going on right now. I honestly cannot
tell you, because it is so early, how the synergies would work. We have
our marketing group, and they have their marketing group. There is a big
difference between a restaurant and an airline," Vanguard spokeswoman
Elizabeth Cattell said.
Men comprise 70 percent of the people who eat at Hooters, whose
buxom waitresses are known for their orange shorts and white, skin-tight
shirts.
Mr. Brooks and a group of investors bought expansion and franchise
rights for the Hooters chain in 1984, one year after it was founded. Mr.
Brooks eventually bought a majority share in Hooters and became its
chairman. Hooters owns or franchises 315 restaurants in the United
States, South America, Europe and Asia.
He started Eastern Foods in 1967 with a $10,000 investment. The
company makes and markets dressings, sauces and bottled water under the
Naturally Fresh brand. Hooters and Eastern Foods are based in Atlanta.
"He believes Vanguard would be a nice complement to his other
businesses," Mr. Block said.
Vanguard Chief Financial Officer David Rescino said yesterday the
airline will liquidate if no investor takes over. The company filed for
bankruptcy July 30, listing $39.7 million in assets and $95.9 million in
liabilities, according to the voluntary petition for bankruptcy it filed
with the U.S. Bankruptcy Court for the Western District of Missouri.
But Vanguard pilots hope Mr. Brooks will make an offer acceptable
to the court and creditors.
"Mr. Brooks is a very successful businessman, and if he would make
an offer for the company, I'd be very pleased," said Arv Taylor,
chairman of the 140-member Vanguard Airline Pilots Association.
Vanguard executives aren't taking a public position on Mr. Brooks'
potential offer for the airline, and other potential buyers have
emerged.
"We're looking for any successful investor, but what [Mr. Brooks]
brings is financial success. We're pleased he's even looking at us,"
Miss Cattell said. "I know there are others who are interested, but I
can't give you a definitive number. Mr. Brooks is definitely a lead
player."
A bankruptcy judge approved a request last week by Mr. Brooks to
give Vanguard $50,000 a week. The money is coming from Hooters Air and
is helping fund the salaries of the remaining 29 persons working at
Vanguard. Nearly all of the airline's 1,200 employees were laid off when
it filed for bankruptcy.
When the money from Hooters Air runs out, Mr. Brooks is expected to
decide whether to make an offer for the low-cost carrier, which flew to
18 cities daily, including Myrtle Beach, S.C., home of the Hooters
chairman.
As of July 1, the airline made 70 flights a day and carried an
average of 6,500 passengers.
Vanguard began to collapse after the September 11 terrorist
attacks, when airlines were grounded for two days and travel declined.
It lost $31 million in 2001 and lost an additional $8 million during the
first quarter of this year.
Vanguard, founded in 1994, filed for bankruptcy protection a day
after a federal Air Transportation Stabilization Board rejected its
request for a $7.5 million loan guarantee. Vanguard did receive a $7.2
million grant from the federal government last year as part of the $5
billion airline industry bailout approved by Congress.
Vanguard, Midway Airlines and US Airways have filed for bankruptcy
protection since the attacks. United Airlines has said it may file for
bankruptcy in the fall.