WestPac receives $20 million cash infusion

Filed under: Uncategorized |

<H3><I>Gaylord, Hunt, and Peiser invest in Springs-based airline</I></SUBHEAD><B>By KAREN SUCHARSKI</B> <FONT SIZE=-1><I>Staff Reporter</I></FONT>

Last week, the Gaylord and the Hunt families expressed their continued faith in the new direction Western Pacific Airlines is flying with a cash infusion of $20 million.

The funds include a $2.5 million loan each family made in December to help with year-end commitments. Each $10 million investment will be exchanged for 100,000 shares of Series B Preferred Stock, which will have a 10% annual dividend payable quarterly, along with other considerations.

The money will be used for “general working capital purposes,” according to a news release.

The GFI Company, owned by the Oklahoma-based Gaylord family, and Hunt Petroleum, owned by the Dallas-based Hunt family, are WestPac’s largest stockholders as of November, when a company controlled by Ed Beauvais sold the two families 300,000 shares of stock each.

Beauvais, along with his family, controls 67.1% of Aviation Holdings Limited Company, which sold the stock. AHLC is a Phoenix-based partnership that includes such former WestPac executives as John Lancy, former attorney; Martin Dugan, former chief financial officer; and Catherine Nagle, former executive assistant to Beauvais.

“We believe that, with the blueprint for growth and the new concepts that the new management has laid out, Western Pacific has a significant opportunity to capitalize on its low cost structure and already strong franchise in Colorado,” Chief Executive Officer Robert Peiser said in a prepared statement. “We are in a position to build our revenue base among the value-conscious business traveler and the leisure market throughout the country.”

Western Pacific’s blueprint includes flying with greater frequencies to fewer destinations for the same low fares for which the company is known. It also includes a frequent flyer program and first class seating.

Many of the changes are designed to attract the business traveler, who accounts for 80% of the air travel market, according to industry analysts.

WestPac has already demonstrated its ability to keep its costs down in a cutthroat industry. It has also demonstrated its ability to attract the leisure traveler with lower fares. It has also demonstrated its ability to make capital improvements to continue to grow.

CEO Peiser and new marketing director Mark Coleman intend to add to the carrier’s abilities while maturing the airline.

Less than one year ago analysts warned that WestPac shareholders should be wary of a takeover attempt. As Peiser makes positive changes in the company, the threat returns. But Peiser isn’t worried. He said the airline certainly won’t stop moving forward simply because it’s worried about a takeover attempt.

“Our [WestPac’s] biggest safety precaution is the concentration of stock,” Peiser said.

Peiser, himself, bought 6,000 shares of stock in December. He also received a grant of 100,000 shares to be exercised over a three-year period.