Originally created 12/29/96

Turner, ValuJet top Georgia business news for 1996



ATLANTA - A tearful Ted Turner watched his broadcasting empire fold into the Time Warner stable in 1996 and ValuJet struggled to return to the skies after a fatal crash in the Florida Everglades.

Turner Broadcasting System Inc. and ValuJet, both Atlanta-based upstarts, demonstrated in the past year how far they'd come from obscure beginnings to wow the big boys.

After making CNN a worldwide phenomenon and the Atlanta Braves "America's team," TBS had a pricetag of $7.57 billion when it became a subsidiary of Time Warner Inc. in October. The merger formed the world's largest media and entertainment company.

"While we become part of history, it's still a great future," said Mr. Turner, who dabbed at tears with a handkerchief during his company's final shareholder meeting.

Mr. Turner, whose brash management style is a polar opposite of the reserved demeanor of Time Warner Chairman Gerald Levin, became vice chairman at Time Warner and its biggest single shareholder.

Most of Mr. Turner's empire will keep its Atlanta base, though some TBS employees will lose their jobs as overlapping functions get cut. TBS has estimated no more than 500 of its 8,000 employees will be laid off, though others have guessed as high as 1,200.

ValuJet may have proved that low-cost, no-frills airlines can compete with major carriers - no less in the back yard of industry giant Delta - but its Everglades crash May 11 underscored the pitfalls of growing too much, too fast.

The carrier served only four cities when it started in 1993. By the time of the crash - which killed 110 people - ValuJet was flying to 31.

Lewis Jordan, the airline's president, said shortly after the crash that ValuJet's growth "as a discount carrier, has been unprecedented."

"Perhaps we grew too fast," Mr. Jordan said.

Questions about the safety of ValuJet and the contractors it hired to do most of its maintenance work resulted in a 15-week grounding of the airline.

After hiring a team of maintenance experts, ValuJet returned to the skies Sept. 30 with a special $19 fare. Workers, many of whom waited out ValuJet's return, and loyal customers alike cheered in balloon-decorated terminals.

But ValuJet's financial picture remains uncertain. The airline's planes were less than half full during November and it reported a third-quarter loss of $21.9 million. The carrier closed the same quarter in 1995 with a $22.7 million profit.

By Dec. 19, ValuJet was using only 15 of its planes. Mr. Jordan said the airline hoped to have as many as 30 aircraft - enough to turn a profit - in the air in January.

Then, the week before Christmas - after selling tickets for flights it didn't have planes to fly - ValuJet received 11th-hour approval to have charters run the routes through the holidays.

ValuJet had announced plans to resume service to West Palm Beach and Fort Myers, Fla., and Dallas-Fort Worth, though it lacked government approval to add the five planes it needed to do so.

About 3,000 travelers counting on ValuJet over the holidays then had to make other arrangements to fly to Dallas and Fort Myers because one of the charter operators, Kiwi International Airlines, failed to provide adequate crews and reliable service.

Georgia's economy got a boost in 1996 from the Olympics, which had an impact of $4 billion and prompted job growth in Athens, Atlanta, Columbus and Savannah.

Donald Ratajczak, Georgia State University's economic forecasting director, predicted Georgia would gain 99,400 jobs in 1996. Although there will be some post-Olympic decline, he expects 85,400 new jobs in 1997.

NationsBank Corp. scored a post-Olympic coup when it swayed Atlanta Olympics chief Billy Payne to come aboard as a vice chairman. Mr. Payne joined the North Carolina-based bank on one condition - he'll be staying in Atlanta.

Vegetables scored an agricultural upset when they surpassed peanuts as the Georgia's No. 2 row crop. The state Agricultural Statistics Service reported in November that vegetable processing accounted for 8.1 percent of farmers' income in 1995.

Peanuts, Georgia's former top crop, dropped to No. 3 with 7.7 percent. Cotton was king with 14.2 percent.

In its biggest gamble since New Coke fizzled in 1985, Coca-Cola announced in December a new soft drink that will compete head-to-head with Pepsi's popular Mountain Dew. Surge is a lime-green, high-caffeine concoction targeted at young consumers.

Surge won't be available until January. But students at Georgia State University got a preview.



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