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FAA grounds Kiwi Air
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March 24, 1999: 4:39 p.m. ET
Agency shuts down discount carrier, citing 'public safety' concerns
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NEW YORK (CNNfn) - Kiwi International Air Lines, named after a flightless bird, became flightless itself Wednesday after federal officials shut down the discount carrier "in the interest of public safety."
The Federal Aviation Administration issued an Order of Emergency Revocation for the Newark, N.J.-based company's operating certificate.
The FAA charged Kiwi was operating planes "in an unairworthy condition," failed to perform maintenance procedures, and failed to follow up on maintenance discrepancies found in FAA audits.
"The (FAA) determined that Kiwi's infrastructure had deteriorated to the point where, without constant monitoring…it is no longer able to sustain safe operations," the agency said.
"Since 1992, when Kiwi was formed, we've flown 8 million passengers safely without incident," said Kiwi spokesman Rob Kulat. "We'll put our safety record up against anyone's."
The FAA said it had stepped up surveillance of the airline because of its financial problems and high management turnover.
Kulat said the company was notifying passengers about the shutdown. He said he was not aware of any stranded passengers.
"We got the morning flights out fine," he said. "There was time to notify people. We're meeting with the FAA tomorrow and we hope to resolve this quickly."
The shutdown order came one day after the company filed for Chapter 11 bankruptcy and received $3 million in financing from Pan Am, which said it planned to buy Kiwi in 30 days.
The bankruptcy filing followed pressure from the U.S. Department of Transportation for Kiwi to file a financial plan or risk losing its operating certificate.
"The DOT wanted us to do something and we did," Kulat said. "That's why we're surprised by this."
Kulat said Kiwi had 687,000 passengers in 1998, a 13 percent increase from the previous year.
The airline, founded by unemployed Eastern and Pan Am pilots, has 10 days to appeal to the National Transportation Safety Board. The order remains in effect pending all appeals.
Kiwi had filed under Chapter 11 in September 1996 and suspended its service the next month. It relaunched in 1997. 
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