Air Transport World

The good neighbor: Lone Star's Mexico connection.(Lone Star Airlines)

DALLAS--Essential Air Service subsidies used to account for 90% of Lone Star Airlines' revenues. Today, that figure has dwindled to 30% for the Dallas/Ft. Worthbased regional carrier. Couple that fact with the mood of the Republican-controlled U.S. Congress that would like the sun to set permanently on EAS and you have a potential Texas-size problem for this nonaligned airline and its chairman and founder, Philip Trenary.

But over the years, Trenary, a former flight instructor at Oklahoma State University, has demonstrated his adeptness at reading the tea leaves. Before the North American Free Trade Agreement (NAFTA) took effect in January, 1994, Trenary was negotiating carefully with a consortium of businesses and government agencies from Chihuahua, Mexico, to take an equity interest in Lone Star. His pitch: In exchange for capital and political muscle, the airlines would provide direct air service from Dallas/Ft. Worth International Airport and other Texas cities to those underserved, industrial-based markets in Mexico. Torrejon, one of those cities targeted by Lone Star, is an industrial city of more than 2 million with no service into a major U.S. hub. Another, Chihuahua City, is home to plants owned by several Fortune 500 companies.

Initial market research indicated that Lone Star could carry up to 23,600 passengers a month on the Chihuahua-DFW route alone. …

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