Remember yesteryear: African American owned airlines in the United States

Remember yesteryear: African American owned airlines in the United States
Wheeler Airlines, Air Atlanta, and DC Air

First a look back at the Black Star Line

“They said that the Negro had no initiative; that he was not a business man, but a laborer; that he had not the brain to engineer a corporation, to own and run ships; that he had no knowledge of navigation, therefore the proposition was impossible.
Oh! ye of little faith. The Eternal has happened.“
— Marcus Garvey, on the launching of the Black Star Line

The Black Star Line was the steamship company operated by Garvey and the Universal Negro Improvement Association (U.N.I.A.) from 1919 to 1922. The Black Star Line was to be the U.N.I.A.’s vehicle for promoting worldwide commerce among black communities. In Garvey’s vision, Black Star Line ships would transport manufactured goods, raw materials, and produce among black businesses in North America, the Caribbean, and Africa, and become the linchpin in a global black economy.

The Black Star Line was incorporated in Delaware on June 23, 1919 and was capitalized at a maximum of $500,000. Shares were valued at five dollars each, and individuals could purchase a maximum of two hundred shares. Black Star Line stock was sold at U.N.I.A. meetings and conventions, by traveling agents, by mailed circulars, and through advertisements in The Negro World newspaper.

To the surprise of his critics, just three months after the incorporation of the Black Star Line, Garvey announced the purchase of its first ship. The “S. S. Yarmouth,” which Garvey intended to rename the “Frederick Douglass,” would set sail with an all-black crew under the command of a black captain, Joshua Cockburn.

The Black Star Line fell victim to overcharging by engineers, thievery by representatives and officers, and sabotage by the Bureau of Investigation, the predecessor to the FBI, under the direction of J. Edgar Hoover. But it was also plagued by mismanagement. The “Yarmouth’s” first commission was to transport a cargo of whiskey out of the U.S. and into Cuba before the start of Prohibition. The ship made the trip in record time, but arrived in Cuba without docking arrangements, and quickly became entangled in a longshoremen’s strike. The “Yarmouth” sat stranded on the docks of Havana, waiting — and losing money — for weeks on end. On another Black Star Line voyage, a cargo load of coconuts rotted at sea because Garvey insisted the ship make ceremonial visits to politically important ports. As a business venture, the Black Star Line quickly became a disaster. Garvey’s supporters invested what was in many cases their life’s savings. Estimates of the company’s losses are as high as $1.25 million.

Yet, the Black Star Line was a powerful symbol to a dispossessed people. Thousands of Garveyites crowded the dock at 135th Street in Harlem to witness the launching of the “Yarmouth.” One spectator described the launch: “We stood on a pile of logs and watched hundreds of people jump up and down, throw up their hats and handkerchiefs and cheer while the “Yarmouth” backed from the wharf and slowly glided down the North River.” In Cuba and Central America, thousands of black supporters on horses, donkeys, and makeshift carts descended on the docks to witness the arrival of the first ship they’d ever seen owned and operated by black men.

Though it was ultimately a business fiasco, the Black Star Line was an important symbol of black potential, and a powerful propaganda and recruitment tool for Garvey and the U.N.I.A. It stands as a major achievement. Facing financial ruin, Garvey announced the suspension of the company shortly after his February 1922 indictment on mail fraud charges stemming from the sale of Black Star Line stock.

Source: PBS American Experience

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Video: Marcus Garvey -UNIA

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Wheeler Airlines
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Air Atlanta
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DC Air
DC Air’s Johnson Names US Airways Executive as Acting President of New Washington-Based Carrier
The carrier is being created with assets bought for $141.2 million by Robert L. Johnson, founder of Black Entertainment Television. The Washington-based DC Air is expected to begin service in the first quarter of next year.

May 31, 2000

DC Air

WASHINGTON, — Just days after announcing the creation of a new regional airline to be based at Ronald Reagan Washington National Airport, DC Air Chairman Robert Johnson has hired an industry veteran as the first member of his management team. N. Bruce Ashby of US Airways was today named by Johnson as acting president of the new entrant among the nation’s major airlines.

Ashby, currently senior vice president of corporate development at US Airways, has extensive experience in planning, finance, scheduling, pricing, revenue management and information systems at US Airways, as well Delta Airlines and United Airlines. He will begin immediate discussions with aircraft manufacturers to develop an all-jet fleet for DC Air, as well as development of other strategic plans for the airline’s structure.

“Bruce Ashby is one of the most experienced and talented young executives in the business today,” said Johnson, who used personal funds to launch DC Air from the routes, equipment, departure/arrival slots, facilities and employees being divested as part of the proposed United Airlines merger with US Airways.

“His expertise will give DC Air a solid management foundation upon which a permanent corps of executives will be selected, and under which DC Air will operate as a high quality, competitive airline from Day One.”

Johnson said he is proceeding immediately to expand the existing Memorandum of Understanding with United and US Airways into a final contract for services and interim aircraft. Toward that end, Johnson has retained Banc of America Securities, LLC to represent him in the financial transaction.

He also indicated he is entering into discussions with aircraft and engine manufacturers to facilitate DC Air’s transition to an all-jet operation. “DC Air will be a strong, viable competitor,” Johnson said.

Under the Memorandum of Understanding with US Airways and United, DC Air will start business with eight 32-seat turboprop aircraft, 19 regional jets and 10 Boeing 737-200 aircraft, as well as airport facilities and take-off and
landing slots at Reagan National.

DC Air’s 111 daily departures from Reagan National will serve airports as far south as Fort Lauderdale, Florida, as far west as Kansas City and as far north as Portland, Maine, and Burlington, Vermont. DC Air will also continue to serve the many smaller communities now served by US Airways Express.

Prior to assuming his current position at US Airways, Ashby was the airline’s senior vice president for planning. He joined US Airways from Delta Air Lines, where he was vice president of marketing development. His career also includes work at United Airlines as vice president for financial planning analysis, and as vice president and treasurer.

Ashby received his master’s degree in operations research from Stanford University in Palo Alto, California; and a bachelor’s degree in economics, also from Stanford.

DC Air is a newly launched regional airline operating out of Ronald Reagan Washington National Airport serving 44 markets in the East, Southeast and Midwest sections of the domestic air travel market. Created out of the proposed merger of United Airlines and US Airways, DC Air is owned and chaired by Robert L. Johnson, founder and chairman of BET Holdings II, Inc, the leading Black-owned and operated media and entertainment company in the United States.

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July 27, 2001

United-US Airways Merger Dead

ABC News

C H I C A G O- United Airlines and US Airways Group called off their $4.3 billion deal today after the Justice Department said it would sue to block the acquisition.

Justice officials said earlier today that the proposed combination, which would have created the world’s largest airline, would have reduced competition, raised fares and harmed consumers.

Vacationing families, corporations and the federal government, which spends millions on air travel, would pay the price if the merger were allowed to go forward, federal government officials said.

“While mergers can further competition, this one does not,” said Attorney General John Ashcroft. “If this acquisition were allowed to proceed, millions of consumers … would have little choice but to pay higher fares and accept lower quality air service.”

As part of the termination agreement, UAL Corp., the parent of United Airlines, will pay US Airways $50 million.

Before the two airlines officially issued a statement calling off the deal, US Airways said it was disappointed that the merger won’t go through.

“We nevertheless must respect the Justice Department’s decision,” the Arlington, Va.-based airline said.

Wanted: New Partner

US Airways said it would announce its next move soon, though analysts say the airline needs to find a new partner.

The department’s decision was widely expected even before United wavered this summer in its commitment to what would have been the largest-ever airline purchase.

Facing big losses, a worsening economy and labor problems, United tried to end the deal in early July but agreed to pursue the merger after US Airways balked at the proposed separation.

Chicago-based United and Arlington, Va.-based US Airways are the second and sixth largest U.S. airlines. The Justice Department said the merger would give United a monopoly or duopoly on nonstop service on over 30 routes and substantially limit competition on numerous other routes.

Consumer choice in airlines would have been severely restricted in hub-to-hub nonstop markets like Philadelphia-Los Angeles, San Francisco-Denver and Pittsburgh-Washington, where US Airways and United are each other’s only nonstop competitor, the department said.

The Washington and Baltimore markets would see reduced competition, the department said, and competition also would suffer on the East Coast because United and US Airways are the only two airlines in many markets offering connecting service between cities up and down the coast.

Consumers would have fewer options on international routes, and businesses and government agencies, which give airlines lots of business in exchange for discounts, would have one less airline to choose from, the government said.

New Airline Had Been Planned -DC Air

United and US Airways had sought to allay regulators’ antitrust concerns with plans for a new airline partly owned by American Airlines to take over US Airways flights out of Washington and by letting American take more than half of US Airways East Coast shuttles.

But regulators said the manufactured competition could not replace true market-driven competition.

American said it won’t proceed with plans to assume US Airways flights if the merger did not go through.

The decision was also a blow for a proposed new airline called DC Air, created by Black Entertainment Television founder Robert L. Johnson.

Shares of UAL closed down 29 cents to $33.63 on the New York Stock Exchange, where shares of US Airways fell 89 cents, or 5 percent, to $17.26.

US Airways has said a merger with No. 2 United was its best chance to remain profitable in an increasingly competitive industry. United, meanwhile, has been surpassed by American Airlines, buffeted by labor and operational problems and lost nearly $1 billion since the deal was proposed.

With a formal rejection of the merger, “United can try to get back to trying to fix their airline and cut back the losses they’re experiencing, which are much larger than the rest of the industry’s,” said Ray Neidl, a New York-based analyst for ABN Amro.