California Pacific Airlines

California Pacific Airlines, a new airline planned for operation out of Carlsbad’s Palomar-McClellan airport has suffered another set back. On August 7, the FAA denied CP Air’s application to begin flying.

Additionally, an aviation industry newsletter based in Los Angeles published an August 20 article stating it doubts CP Air can over come their challenges.

The airline, which rolled out their plans, and their newly painted, 74 passenger, Embraer E-170 plane in July of 2012, have had to extended estimated start dates several times. Their last estimation, issued several months ago upon hiring a former American Airlines executive as the new CEO, was to be “wheels up” by this November.

Upon his hiring, CEO John Selvaggio stated that starting an airline was more difficult than starting a nuclear power plant. (The last new airline approved in the U.S. was Virgin America in 2007) Selvaggio reportedly is confident the FAA’s concerns will be addressed by the FAA’s deadline.

After taking the FAA almost a year to review, and blaming the delay on the federal budget sequester, spokesman for the western region of the FAA, Ian Gregor, said, in a published report there were now concerns about CP Air’s application regarding safety and maintenance. The FAA plans to met with company officials, but has given the airline until September 13 to resubmit their application.

One major challenge; due to the FAA’s delay, the airline no longer has its plane that it premiered in 2012. In order to stop the flow of money on the unused aircraft — $200,000 spent so far - Embraer has sub-leased the plane to the Honeywell Corporation in Phoenix.

Obviously a plane is required before an airline could be approved. Company officials stated the lease is “frozen” so that CP Air doesn’t have to pay additionally until the plane is actually needed.

The only positive note that may encourage CP Air and its investors to try to continue is that the industry is experiencing an era of lower fuel costs and offering less flights, thus more passengers filling seats per flight. Several established airlines are actually posed to make a profit for the first time in decades.

CP Air was conceived in 2010 by 94-year-old Ted Vallas of Rancho Santa Fe, who has spent millions of dollars of his own money. He wanted to have an airline that replicated the fun of flying on the former Pacific Southwest Airlines, which was based in San Diego. US Air purchased PSA in 1998.

CP Air plans to fly out of Carlsbad to Cabo San Lucas, Las Vegas, Phoenix, Oakland, Sacramento, and San Jose with connections worldwide with other airline partners. The Carlsbad hub will be marketed as “San Diego North.”