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UltrAir to Cease Flights Sunday

July 23, 1993

HOUSTON (AP) _ UltrAir Inc., the luxury airline that took off six months ago but was buffeted by price wars with larger carriers, said it will cease regular flights late Sunday.

The announcement Friday came one day after Barney Kogen, the Houston-based carrier’s flamboyant founder, said he had sold his stake in UltrAir. On Friday, Kogen blamed Houston-based Continental Airlines for his carrier’s demise.

″I attribute UltrAir’s departure from the scheduled airline business to what I believe to be the illegal, anti-competitive, monopolistic and predatory behavior of Continental Airlines,″ Kogen said in a statement.

Continental, responding to the accusations, said its fare pricing in a cutthroat industry was ″totally lawful.″

″To imply that our actions were illegal and taken for any other reason is ludicrous and clearly without merit,″ Continental said.

Ironically, Continental and Northwest Airlines are suing American Airlines over alleged predatory pricing. But Continental said any comparison between its lawsuit and Kogen’s accusation ″is truly a classic case of comparing apples with oranges.″

UltrAir said it will cease all scheduled flights between Houston Intercontinental Airport, Newark, N.J., and New York’s LaGuardia at the close of business Sunday.

Passengers holding tickets for future flights will either be accommodated on other airlines or will get full refunds, the company said. Continental and American said they would honor UltrAir tickets.

UltrAir said it will remain in the airline business, but did not provide specifics.

Kogen and other UltrAir executives were not available for comment Friday.

Kogen said Thursday he had sold his stake in the company to an unnamed buyer.

UltrAir began operations in January, seeking to woo business travelers with more leg room, tasty in-flight meals and a convenient flight schedule. But the carrier soon ran into turbulence.

In March, UltrAir became embroiled in the industry’s fare wars when Continental undercut UltrAir’s fares to Los Angeles, one of its original destinations. UltrAir ended up pulling out of Los Angeles.

Kogen accused Continental of creating a ″Kill UltrAir Committee.″ In June, Kogen and UltrAir sued Continental, claiming unfair pricing practices. Kogen said Thursday he would continue his individual suit against Continental.

The airline has been unable to fill a sufficient number of seats, despite rave reviews of its service and in-flight meals.

UltrAir served 11,689 passengers at Houston between January and the end of June, according to Houston’s Department of Aviation. But the airline had 2,676 Houston passengers in June, up 43 percent from the 1,868 passengers in May.

In March, the carrier offered discount fares after vowing not to do so. ″We didn’t realize that the full-fare market was going to be as thin as it was. It was a bit of a miscalculation,″ Kogen said at the time.

Figures on the airline’s load factor, the ratio of seats available to seats filled with paying passengers, were not immediately available.

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