Risky Business

By Sally B. Donnelly/Kuwait

It's been a dark time for the U.S. airline business--or at least most of it, with profits scarce and bankruptcies plentiful. But one corner of the market is booming: obscure airlines like World Airways, Atlas Air, Omni Air and Evergreen that provide private transport service to the U.S. military. The Pentagon--which has been a steady customer since Sept. 11, as it moves troops and equipment from bases all around the world and back again--will spend $2 billion this year on such air transport, up from $772 million in 2000. In addition, such international agencies as the U.N. and the Red Cross turn to those airlines to get people and supplies into troubled parts of the world, whether conflict zones or areas with natural disasters like the Asian tsunami.

No airline has benefited more than World Airways, a wholly owned subsidiary of publicly traded World Air Holdings that is now the U.S. military's biggest passenger airline. The company, with just 17 planes and some 1,400 employees, gets 80% of its business from the Defense Department. Revenues have jumped to $500 million in 2004 from $264 million in 2000, and its stock price has increased from 55-c- a share to nearly $8 a share. "It's part of our heritage to go where others won't," says Randy Martinez, the airline's CEO and a former Air Force pilot, who noted that his airline was the first to fly a commercial flight into Baghdad after the U.S. invasion. "All the indications are we will continue to be awfully busy with military work for the foreseeable future."

World isn't just a military flyer. It also transports two National Football League teams during the NFL season; operates an all business-class charter for oil companies from Houston to Luanda, Angola; has signed a commercial contract to start flying from Washington to Kabul, Afghanistan, as soon as U.S. authorities determine that the airport is secure; and was recently hired by Air Canada and Thai Air to provide cargo services.

Started in 1948, World has teetered on the edge of financial ruin several times. It made its name flying refugees during the 1956 Hungarian Revolution and U.S. troops during the Vietnam War. A World aircraft was the last commercial airplane to leave Da Nang in 1975--overloaded with so many Vietnamese that eight turned up in the wheel wells. After an unsuccessful attempt at becoming a regularly scheduled carrier in the 1980s, World focused on military flying in the 1990s.

Today the airline operates about 20 flights a day to some 60 countries--and the destinations are often dicey. Pilot David Hyman recalls a recent layover in Bishkek, Kyrgyzstan. He had to take shelter at a nearby U.S. military base when demonstrations erupted. As a precaution, World's airplanes not only carry mechanics on many flights but also bring along 5,000 lbs. of spare parts such as tires, windshield wipers and brake pads--just in case. In an industry in which adherence to routine and regulations is required, World attracts employees who thrive on the unexpected. "I've already been to 49 countries," says Marc Vetterick, the airline's Atlanta airport manager.

The airline's crews, who can be on the road for weeks at a time, are given significant responsibilities. "This is the only airline in the world where the company essentially hands you a $100 million airplane, a full load [and] a credit card for emergencies and sends you to a bizarre or dangerous place and tells you to get it done," says Captain Harry Constantine, a former Eastern Airlines pilot who has been at World for nearly a decade. "Compared to World, flying for a major passenger airline in the U.S. is as dull as driving a bus." These days it's also a lot less profitable.