Monday, February 23, 2015

Air route at center of Port Authority probe was one of nation's loneliest


Former Port Authority Chairman David Samson

Former Port Authority Chairman David Samson

An airline route under federal investigation as a possible perk for the former chairman of the Port Authority featured planes that were, on average, among the emptiest nationwide, with many flights so sparsely occupied that passengers could have entire rows to themselves.

The United Airlines flight in question, a non-stop between Newark and Columbia, S.C., ranked in the bottom 3 percent of all commercial passenger routes nationwide based on the share of seats filled. And it was dead last in that category among routes flying out of Newark Liberty International Airport, The Record’s analysis of nearly 25 million flights over a 19-month period found.
The 50-seat flights were typically about half full but sometimes had fewer than 15 passengers onboard, the analysis found.

Federal prosecutors are investigating whether the route was set up, in part, to provide former Port Authority Chairman David Samson with more direct travel between Newark and his weekend home in Aiken, S.C., about 50 miles from the airport in Columbia. There were two round trips a week, with a flight to Columbia on Thursday evenings and a flight back to Newark on Monday mornings.

The flight — which Samson referred to as “the chairman’s flight,” according to one source — was initiated when Samson was chairman and stopped three days after his resignation in late March of last year.

The airline industry has in the past established so-called convenience flights for powerful officials who regularly travel between particular cities, but there is usually enough additional demand to justify it, aviation experts said. Samson was in charge of a transportation agency that controls the region’s airports and has numerous business agreements with United.

It’s difficult to determine whether United lost money on the Newark-Columbia route — operated by a third-party regional carrier called ExpressJet Inc. — and if so, how much. But the examination of data maintained by the Bureau of Transportation Statistics for flights between September 2012 and April 2014 found that:
  • Of all 162 routes between Newark and other domestic destinations over that time, the Columbia-Newark flight came in last in average passenger load.
  • The Newark-Columbia route had a 51 percent average passenger load compared with an average of 80 percent for all flights nationally and 79 percent for all ExpressJet flights from September 2012 through March 2014.
  • The low passenger load persisted despite an unusually low number of flights between Newark and Columbia — just two round trips bracketing weekends. Almost 90 percent of the established routes operated by ExpressJet, which also provides regional service for Delta Air Lines and American Airlines, had a higher frequency of flights.
Although it was previously known that the flights were typically half full, The Record’s analysis is the first to show how the flight compared with others nationwide.

The Port Authority and United Airlines received federal grand jury subpoenas last month, and prosecutors have contacted officials at Columbia Metropolitan Airport, the airport’s executive director has said. A spokesman for ExpressJet spoke generally about its business relationship with United last week but did not respond to multiple, subsequent inquiries about whether the company had received a federal subpoena. The U.S. Attorney’s Office for New Jersey declined to comment, as did a spokes­woman for Samson, a former New Jersey attorney general.

United Airlines said Friday that it is conducting an internal probe after the company and multiple employees received federal grand jury subpoenas. The revelation came in the company’s annual report to shareholders, released on Friday afternoon, and it provides more details on the activities of federal prosecutors in New Jersey.

“The company and certain of its executive officers and employees have received federal grand jury subpoenas requesting records and testimony related to certain individuals formerly associated with the Port Authority of New York and New Jersey and related operations of the company,” the report states.

The Record first reported earlier this month that the Port Authority had received a federal subpoena related to Samson’s personal travel and his communications with United and its former lobbying frim, Fox Shuffler. A principal of the firm at the time, Jamie Fox, is now Governor Christie’s transportation commissioner. Fox is also a close friend of Samson’s.

Samson’s replacement as chairman at the Port Authority, John Degnan, said on Thursday that he would not comment on the investigation while it was continuing but added that it would be illegal for any Port Authority commissioner to use his position for personal gain.

“If it happened here, it will be the subject of the outcome of the investigation, and people who are involved will pay the consequences,” said Degnan, also a former New Jersey attorney general. “There’s no failing on the part of the Port Authority, no lack of clarity on what the responsibility is for the commissioners with respect to that. We should not ever, under any circumstances or for any reason, leverage our positions at the Port Authority to secure a personal benefit.”

Robert W. Mann Jr., an airline industry analyst and former airline executive, said “there’s probably ample precedent” for flights designed to accommodate powerful politicians — especially flights out of Washington, D.C., to smaller markets in lawmakers’ home districts or to state capitals.

But he said the Newark-Columbia route was different in at least one respect.
“If you’re flying two days a week and it happens to bracket the weekend, it’s a little different case,” he said.

Weekend-only routes are not rare for leisure destinations, Mann said, citing a Saturday-only flight route between Columbus, Ohio and Ft. Lauderdale, Florida that was initiated at one of the airlines where he previously was an executive. That flight was often full with passengers travelling to cruise ships, he said.

But established flight routes to state capitals typically provide daily service and “are really designed for a business clientele, along with incidental legislator use,” Mann said.

“So looking at it from the standpoint of the pattern of service,” he added, “there had to be a reason for this route, and it probably wasn’t carrying high value business customers to and from Columbia and Newark.”

United Airlines, like other carriers, uses regional jets operated by a separate company to provide service to smaller airports. That allows airlines to draw passengers into their larger hubs that provide connections to the major carriers’ domestic and international flights. United operates a hub at Newark, but has a closer one to Columbia, S.C., at Washington Dulles International. United pays ExpressJet to operate the service, but takes the financial hit if the planes fly few passengers.

Jarek Beem, a spokesman for ExpressJet, said the company has an “overarching agreement” with United but that “flight schedules change from month to month, and they can tell us when they want them to change.”

Ted Reed, an airlines reporter for The Street and Forbes who has covered the industry since 1989, said he has seen past examples of flights that happened to help powerful people.

“For United to operate a route to accommodate the Port Authority chairman would be the continuation of a very common industry practice,” he wrote in an email. Among the past examples, he said, was a route by US Airways from the nation’s capital to Greenbrier, W.Va., for former U.S. Sen. Jay Rockefeller, a Democrat from West Virginia. Reed wrote in a 2002 article for The Charlotte Observer that US Airways had a special manager for “chairman’s preferred liaisons,” a position dedicated exclusively to dealing with members of Congress and extremely frequent fliers.

Whether there is a potential criminal case could hinge on whether United offered or Samson accepted the flight route in exchange for advancing the airline’s business interest, one legal expert said.

“It seems to me that one possible theory is whether or not they gave David Samson something of value to influence his decision making with regard to federal funds,” said David Lat, a former federal prosecutor and now managing editor of “These types of federal statutes don’t have to be satisfied by bags of money.”

The Port Authority and Samson were involved in negotiations with United on several fronts, though it’s unclear if the airline got any preferential treatment.
In late 2013, United was pressing the Port Authority to reopen its lease agreement at Newark Airport, said one person familiar with Port Authority operations. The George Washington Bridge lane-closing scandal erupted around the same time, and the lease was not revised. Earlier in 2013, in February, Samson and the Port Authority board of commissioners voted on a 20-year extension of the existing lease inherited by United after its 2010 merger with Continental, for use of portions of Newark’s Terminal C. The airline agreed to put $150 million of its own money up to renovate the terminal over that time.

Samson was also involved in negotiations for United to expand service into Atlantic City. And the Port Authority agreed to extend the PATH train to Newark Liberty, a project that United also pressed, several agency sources have said.


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