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American Central Suspends Operations After Purchase Plan Falls Through

July 25, 1985

DUBUQUE, Iowa (AP) _ American Central Airlines today suspended all operations after a plan calling for the Dubuque-based carrier to be purchased by an Ohio airline fell through.

American Central Manager Gary Heim said the announcement by Comair of Cincinnati late Wednesday that it was dropping plans to purchase the Iowa air carrier led to the decision to ground its planes at the end of Wednesday night’s schedule.

American Central serves 15 cities in Iowa, Illinois, Wisconsin, Minnesota, South Dakota, Nebraska and Missouri.

Comair’s decision was based in part on doubts about the status of American Central’s landing and departure slots at O’Hare International Airport in Chicago.

Heim said he is hoping a group of Dubuque investors still can put together a deal to buy the airline. But a spokesman for that group, Arnie Honkamp, said today such a deal appears unlikely.

He said would check whether the group could hold American Central’s O’Hare slots. If it can’t, he said, his group would no longer try to raise money to buy the airline.

American Central, which went from one eight-seat airplane in 1980 to flying 170,000 passengers in 1984, in March filed for protection from its creditors under Chapter 11 of the federal bankruptcy code.

The key to the sale to Comair had been the acquisition of American Central’s landing and departure slots at O’Hare. Comair does not currently operate out of Chicago.

But a ″slot committee″ at O’Hare, made up of representatives of airlines, decided it could not guarantee that Comair would receive the same level of service at O’Hare that American Central had, and that killed the sale, said Gloria Weber, a Comair spokeswoman.

Comair’s service area stretches from Virginia to Milwaukee.

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