June 17, 2012

Massport pumped cash into failing Direct Air

That is title of today's story in the Telegram, click here for link.   Do I have a problem with Massport trying to help Direct Air, of course not, but I do find many things troubling.

1) Massport: Interim chief David Mackey was aware of their shaky financial conditions to the extent he says in an -email "there is no question it is operating on shoe string".     If you believe this should you not.
  • Ask for an accounting of the tickets sales monies that are suppose to be safe in their escrow account
  • Not allow them to sell vouchers or memberships, which did not go in the escrow account but directly into their general operating account.   
Bottom line is Massport was aware that Direct Air was in trouble, but did nothing to look out for the public spending money on Direct Air.

2)  Airport Direct Andy Davis knew about the company financial problems:

  • the company handling the ground operations had not been paid. 
  • in fact he sent an e-mail to Ed Warneck on February 22nd mentioning  overdue bills and an extremely large volume of complaints.
Does Andy Davis ask for accounting to make sure the monies from ticket sales are safe?  Does he tell Direct Air that he will not allow them to sell vouchers or memberships, which went straight into the General fund and avoided the escrow account?  No. 

In facts he tells one person in an e-mail dated February 12th "Direct Air's service has been extremely successful out of Worcester and continue to grow".    One month later, Direct Air closes their doors.   Makes you ownder if that person in fact bought tickets after this e-mail response from Andy Davis.

3) No inkling of impending implosion.      I seen this coming?  Predicted their demise last fall by Ground Hog's Day and warned people not do business with them.  Not being a Monday morning quarter back either, read my blog.      These guys seen it coming too, who are they kidding, as evidenced by their own e-mails.

They need to say that they are shocked since they (MassPort and our Airport Director) did nothing to look out for our monies.    They should have forced Direct Air not to sell and memberships or vouchers and demand an outside audit of their escrow account.  If they did not, stop giving them money and cut ties with them.

Instead they did nothing and actually encouraged people to keep doing business with Direct Air.


Claude P. Dorman - Worcester Wonderland said...

Fairly clear William that there are political footprints all over this. If it was a viable airport there would carriers there for commercial flight.

Allegient left for a reason just like Legal Seafood and every other fleeing business prior. You are in the r.e. bussiness....what is your quality tenant pool look like when renting flats.

John Gatti Jr said...

From: The Massachusetts Whistleblower

Excellent investigative research and reporting that The Telegram should be proud.

Massport like so many state authorities lack any semblance of accountability and oversight the legislature and local officials do nothing about. This never ends.

The bad odor pit Massport is all about is shown in giving out a new consultant for new construction in Boston to those in the Big Dig Oversight and Design in their $21 Bilion Century Artery failure. Imaging rewarding that failure giving another a part of the team another contract!

The community, citizens, and supporters want Worcester Airport to succeed…..All we continuously receive are hype, failure, and broken dreams.

Steve Foley said...

I couldn't help but notice that the article was written by the "Watchdog T&G Investigative Team".

Isn't a watchdog supposed to do something BEFORE the burglar succeeds, rather than bark at him after he's done?

Reminds me of the Mayhem in the Allstate guard dog commercial.

jahn said...

Bill, I agree with your last line. MAssport by keeping DA on the resusitator enabled DA to hang on longer and in turn collect more money for future flights that would never happen.

I didnt read the entire article but it did say DA stiffed other vendors and I have to wonder if any pressure was put on other/smaller vendors by Massport to extend add'l/more credit to DA.

I cant say it was criminal, but can anyone see the possiblity of group civil law suit against Massport by those who were burned by DA?

Anonymous said...

Image what the return would have been had they put that money into Allegiant stock, instead?

Just saying...

Harry T

Anonymous said...

Allegiant stock has broken yet again, another record high today ... http://finance.yahoo.com/q/bc?s=ALGT

Harry T

jose said...

when massport says they lost money (i think they said it cost them 5 million last year, 1 million coming in) does that include money in this article? if this is the case then it sounds like orh is big of a money pit as the boston herald made it sound like. i think we all can agree if massport brought in a airline to fly a few routes, a real airline like jetblue, they would be more successful. they have money to pay their own advertisements, and more of it. i live in milford and it wasnt until last summer that i realized worcester had direct air.