A Reno Air heritage tail was added to the American Airline fleet in 2015. Although Reno flew MD-80s, ... [+]
Reno Air didn’t leave a big footprint on the airline industry. It primarily operated out of Reno, one of the smallest hubs in U.S. history. It never got big. Its name obviously did not survive. And it only flew for seven years.
Still, this is a week to remember Reno, which flew its last flight on August 30, 1999, twenty years ago Friday.
Reno first flew July 1, 1992 with a single McDonnell Douglas MD-80. It grew rapidly through much of its existence. Eventually, it would have about 3,200 employees, three dozen McDonnell Douglas aircraft and hubs in San Jose and Reno, where it had about 100 daily departures.
American Airlines bought Reno in November 1998 for $124 million and made a quick transition. A former Reno pilot, who now flies for American and asked not to be named, remembers the carrier’s final days. “I was on a three-day trip, Reno to Oklahoma City,” he said. “I brought a new American uniform with me so I could change” for the flight back.
At Reno, “Everybody knew everybody – pilots, mechanics, dispatchers, flight attendants,” the pilot said. “It was like a commuter, but with big jets. They treated you well.”
Another Reno employee was Annette Murphy, a 44-year industry veteran whose career includes stints as a sales executive at American and US Airways. “I loved working at Reno Air,” Murphy said. “It was a great little company. Everybody was motivated to make it successful.”
Murphy spent about 15 months at Reno, ending up as senior vice president of passenger services. She had already spent three decades at big airlines when she arrived. “Most people start small and move to big,” she said. “For me, working at Reno was like going to graduate school, because I was exposed to everything.”
Murphy joined Reno so she could work with Bob Reding, who was president and CEO. Reding had been vice president of flight operations at Chicago-based Midway Airlines, which filed for bankruptcy protection in 1991. Jeff Erickson, who co-founded Reno with industry veteran Joseph Lorenzo, had been president of Midway.
As a hub, Reno is a smaller version of Las Vegas, with plentiful leisure traffic, including some attracted by nearby skiing. Its founders saw a vacuum in West Coast flying after the demise of AirCal and PSA and before rapid expansion by Southwest. Reding recalls visiting Ericksen in Reno and deciding: “This is a crazy idea – I’m all in.”
The two executives brought hundreds of employees from Midway to Reno – pilots, mechanics and dispatchers. Customer service agents and flight attendants were hired locally.
“We hired a great team of employees: that was the strength of our company,” Reding said. “The first 1,000 employees, we hand-picked; they had good attitudes, people skills, and a safety mentality.” About 200 of Reno’s 300 pilots came from Midway. “The first guys, we made them all captains,” Reding said. “We knew we would grow rapidly.
“We didn’t have a lot of money when we started, and everyone wanted to help,” Reding said. “We were a family. Easily 50% of the employees were from Midway. The catering department [about a dozen volunteers] was my wife and some of the other wives.
“In first class, they gave out baskets of high-quality local products; rolls, sandwiches, snacks,” he said. “We didn’t have a catering truck. The wives hand-delivered everything to the airplanes in laundry baskets.”
In aircraft selection, the MD-80s won out over the Airbus A320 because the engines had more power, an advantage for takeoffs at Reno, with its summer heat; high 4,145-foot altitude and a hill at the end of the runway. The carrier later acquired a half dozen MD-90s to accommodate noise restrictions in Orange County.
The first flight was LAX-Reno-Seattle. It worked because thrifty passengers were willing to travel one-stop between Los Angeles and Seattle. In the first three months, Reding said, efficient Reno did not cancel a single flight.
The carrier grew rapidly. Within three months, it had three MD-80s and two new cities: San Diego and Portland. “In the first four years, we doubled in size every year,” Reding said.
By 1997, Reno had a second hub in San Jose and service up and down the West Coast, including Alaska, as well as Reno to Atlanta, Chicago and Detroit. Executives wanted to serve New York, but fully loaded MD-80s, encumbered by Reno’s high-altitude takeoff, couldn’t carry enough fuel to make it non-stop.
Financially, Reno – which was publicly traded on the NASDAQ exchange — had up years and down years, often depending on fuel prices. Reding some said business markets such as San Jose-Orange County were profitable, but many Reno markets were challenging in the off seasons.
A turning point came in the late 1990s because the principal founding investor had a five-year investment horizon. That investor was Paradise Valley Securities, a Phoenix-based investment company that raised funds from dentists interested in starting an airline.
“We were growing rapidly, and we needed more airplanes, but when you buy airplanes the founding investors generally get locked up [unable to sell their stock],” Reding said. “The only way to monetize the investors was either to sell their shares to another financial enterprise or to sell the company. The board decided it was best if we offered the airline for sale to the existing majors.
“My feeling was that I spent years building the airline and disagreed with selling it,’ said Reding, who resigned in 1998. “If we had to find someone to buy out the initial investors, I wanted to maybe have the casinos buy the company and continue flying the airplanes as big billboards advertising Reno.” But the casinos wouldn’t bet on the volatile airline industry.
As a buyer, American was a natural fit. Reno was part of its frequent flier program, the MD-80s were compatible with its fleet, and the carrier didn’t want to lose out on the West Coast for a second time. “American and US Airways had gotten into the West Coast [with acquisitions] and then shrank,” Murphy said. “Southwest and United took advantage. Then American felt they needed to grow again.”
The last Reno MD-80 left the American fleet around 2000, while Delta bought the MD-90s.
The takeover was a challenge for the small group of Reno pilots. At first, it seemed that American might seek to keep them on at Reno pay rates, which would violate the Allied Pilot Association scope clause. American pilots staged a sickout in 1999.
The former Reno pilot said the Reno pilot group was “a band of refugees – guys from Midway, a couple of guys from Braniff, some from Eastern,” he said. American’s purchase “wasn’t a surprise to anybody. Consolidation was happening.”
Afterwards, American “worked quickly to erase the Reno name – they didn’t care for legacy,” the pilot said, while APA stapled the small group to the bottom of its seniority list.
“You had to be pragmatic,” the pilot said. “When it was all said and done, staple was what they were bound and determined to do. And we were 300 guys against 12,000.” While some resented having to give up a captain seat, working for American meant higher pay for all and eventually, after years of shrinking, a good career path.
Today, about 140 Reno pilots remain at American. Most have made captain, although a few have chosen to remain as widebody first officers.
