Vanguard Airlines

It may be a banner year for the major airlines, but two start-up carriers that serve California--Western Pacific and Vanguard--are grappling with heavy turbulence. Their financial problems already have forced one, Vanguard, to trim its service to the state, and more setbacks could further jeopardize local travelers' ability to use the pair's low-fare service to selected cities in the Rockies and further east. Western Pacific is based in Colorado Springs, Colo.

Vanguard Airlines Inc. filed for Chapter 11 bankruptcy amid a liquidity crunch that forced the low-cost airline to shut down operations and fire about 1,000 employees. The Kansas City-based based carrier said it continued to seek funds in order to resume operations, but Chief Executive Scott Dickson said the company's shutdown probably would be permanent.

With little hope for returning to the air, ailing discount carrier Vanguard Airlines Inc.'s decision to reorganize rather than sell everything off has left a nagging question: Why? After all, the company, which bled money year after year, failed to get the funding it needed in nearly a year of begging the government and private lenders for help.

The average interest rate on a 30-year fixed-rate mortgage dropped to 6.22% this week, the lowest level in 32 years of record keeping, Freddie Mac said. This week's rate surpassed the previous low of 6.31% set last week. The average interest rate on 15-year mortgages, a popular option for refinancing, fell to 5.63% this week, the lowest level since Freddie Mac began tracking these rates in August 1991. Last week's rate was 5.69%.

Passengers stranded when a bankrupt airline cancels flights are entitled to fly standby on other carriers for no more than $25 each way, the U.S. Department of Transportation has ruled. The Aug. 8 notice was issued after the department received complaints about the treatment of passengers stranded when Vanguard Airlines filed for Chapter 11 bankruptcy protection and stopped flying July 30.

AIRLINES * A group headed by the owner of the Hooters restaurant chain offered to buy some of the assets of Vanguard Airlines Inc. Hooters Air, led by Hooters of America Inc. owner and Chairman Robert H. Brooks, hopes to establish a new commercial airline based in Kansas City, Mo.

Vanguard Airlines said it will launch nonstop service between Los Angeles International Airport and its home hub airport in Kansas City, starting Oct. 12. The carrier will offer two flights daily between LAX and Kansas City, with fares starting as low as $99 each way. The small airline also serves such cities as New York, Pittsburgh, Chicago, New Orleans and Dallas/Fort Worth.

An airline that offered free tickets to anyone who showed up at a stadium parking lot with a case of food for the poor was overwhelmed by generosity Friday. Nearly 3,000 people, bearing canned goods and braving bitter cold, were lined up in the dark when Vanguard Airlines arrived at Kauffman Stadium about 4 a.m. Airline officials who had planned on giving away no more than 1,000 round-trip tickets, good for anywhere the airline flies, were caught off guard by the crowd size.