Air Transport World

Coddling the rich and famous. (MGM Grand Air) (company profile)

Los Angeles-If you aren't a devotee of television's "Lifestyles of the Rich and Famous," you may not have heard a lot about MGM Grand Air. Although the luxury airline's officers say people don't have to be rich or famous to fly between Los Angeles and New York on its lavishly appointed 75-passenger DC-8-62s or to flit around the world on its equally opulent 34-passenger 727-100 charter aircraft, they admit that "it would be a lot easier to list the celebrities who haven't flown with us than the ones who have."

MGM Grand Air, which launched service with three 727s on Sept. 8,1987 and added three ex-Alitalia DC-8-62s to its fleet last August, is not the first airline to try to carve out a premium-class niche. It does, however, show strong signs that it will be the first to succeed with the concept. Says President/CEO Charles Demoney, it has "learned a lot" from the mistakes of defunct predecessors such as Air One, McClain and especially Los Angeles-based Regent Air, which folded in 1986 and whose 727s MGM Grand acquired.

Demoney, whose background includes more than 25 years in marketing at Frontier Airlines and New York Air, says that MGM Grand Air enjoys a big advantage that other all-first-class carriers did not-"sound financial backing" from its parent, billionaire Kirk Kerkorian's MGM Grand, Inc., and "a philosophical commitment from our owner and our board of directors to make the airline work." A lot of airline experience is on that board. Kerkorian got into aviation by buying and selling DC-3s after World War II, founded Trans international Airlines-which he sold to Transamerica-was a major shareholder in Western Airlines and flirted with the purchase of Pan Am in 1987 and again recently. Chairman Fred Benninger is a former chairman of Western and before that was chief financial officer of Flying Tigers.

It was Kerkorian, who Demoney says "has a unique ability to perceive what the public wants," who decided the all-first-class concept was sound and that it was the execution that had been faulty in the past. …

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