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Best of Airways — Southern Air Transport: An Uncommon Carrier

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Best of Airways — Southern Air Transport: An Uncommon Carrier

ED PASCUZZI

Best of Airways — Southern Air Transport: An Uncommon Carrier
July 17
13:00 2017

By Maurice J. Wickstead • Airways Magazine, June 2014


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SOUTHERN AIR TRANSPORT • BOEING 727-100C • N5055. PHOTO: AW SCHELL COLLECTION.

Frederick C (Doc) Moor Jr returned home to Tallahassee, Florida, after wartime military service with the dream of starting his own airline. He bought a down-at-heel twin-engine Cessna UC-78 Bobcat with the intent of running charters but meanwhile had to earn a living. After a brief spell with National Airlines, he went to work for Skyways International of Miami. This was one of the plethoras of what the Civil Aeronautics Board called Large Irregular Carriers, which had sprung up to capitalize on the glut of surplus transport aircraft and aircrews.

Moor was well-qualified, with 3,000 hours and 60-plus Atlantic crossings under his belt. A former instructor with the Embry-Riddle School of Aviation, Moor joined Pan American Ferries and then the US Army Air Forces’ Air Transport Command, flying the Consolidated C-87 Liberator Express on the ‘Fireball Express’ supply run between Miami and India.

Under Moor’s sole proprietorship Southern Air Transport (SAT) was established early in 1947, joining the ranks of the Large Irregulars. Operations began in July with a Douglas DC-3 leased from George Batchelor’s Arrow Airways. The new outfit’s first significant customer was Paramount Aquariums of New York, and SAT’s aircraft was soon regularly trundling south to Belém in Brazil to bring back consignments of exotic fish in 5USg (20l) drums.

Among the early pilots was Everett E Jones, something of a salesman. During layovers, he began to take orders from locals for much-desired consumer goods and medicines. To satisfy this demand and fill the otherwise empty southbound leg, Southern Air Trading was borne. By the end of 1947, this business had netted some $50,000 (equivalent today to $500,000).

Southern Air Transport, formally incorporated on October 31, 1949, had been looking for its own aircraft. Coincidentally, the US Air Force was selling off large quantities of surplus Curtiss-Wright C-46 Commando twin-engine transports through the Reconstruction Finance Corporation. SAT snapped up four examples from storage at Walnut Ridge, Arkansas, reportedly for a total price of less than $30,000 ($300,000 today).

According to Moor’s biography, pending certification for commercial operations, one was retained and the remainder were sold by the ever entrepreneurial Jones to Rutas Aéreas Nacionales SA (RANSA), an emergent Venezuelan cargo airline, in return for a 50% holding. The RANSA operation expanded quickly mirroring the trading pattern set by SAT. A growing fleet shuttled between Miami and Venezuela’s major cities carrying consumer goods both for individuals and under contract to the likes of GEC, Whirlpool, and Lucky Strike. After a while, Moor tired of his increasingly dominant partner and sold his stake in RANSA to Jones, who later became the airline’s chairman. Just as well as it turned out, for in July 1960 RANSA’s principal, Carlos Chávez, was arrested on charges of attempting to assassinate Venezuelan President Rómulo Betancourt and the airline was subsequently nationalized.

Being willing to tackle almost anything, through the 1950s SAT found sufficient work to keep going, mainly in South America. Until late in 1952 it operated US government Commercial Air Movement (CAM) flights transporting military personnel. One of these missions carried scientists to Las Vegas to observe atom bomb tests at the Nevada Proving Grounds. Another contract involved the transfer of overhauled engines from Robins AFB, Georgia, to air bases around the country.

Southern Air Transport also carried immigrants from San Juan to New York, Brahma cattle to South America, racehorses, and exotic tropical animals. On one occasion a crate containing live snakes broke open and it took a couple of days to catch all the reptiles hiding in the darker reaches of the C-46. All manner of general cargo was hauled, not least seven tons (6,350kg) of gold bullion from Medellín, Colombia, to New York.

In 1959, the CAB granted SAT a Supplemental certificate for cargo operations and authority for flights around the Caribbean.

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SOUTHERN AIR TRANSPORT • BOEING 727-100C • N5092 SGN May67. PHOTO: RODGER D FETTERS-WAYNE MUTZA COLLECTION

Enter the CIA

While the Central Intelligence Agency already had its own air arm, Air America, created in 1950 (as Civil Air Transport Inc) to support US foreign policy objectives in the Indo-China region, there was a desire to create a contingency ‘air force’ with an eye toward future ventures in Latin America. In summer 1960 a search began for a suitable established ‘front’ carrier, especially one in possession of a Supplemental certificate, which Air America lacked. This was now a mandatory requirement to enable bidding for lucrative military airlift contracts to offset running costs, while still remaining available to fulfill CIA operational needs.

Southern Air Transport, by now unprofitable and with assets of around only $100,000 (approximately $775,000 today), proved an attractive candidate and the airline changed hands on August 5 for $307,506.10 ($2.42m), ostensibly to Actus Technology, a front corporation. The transaction was handled through two government nominees, Percival F Brundage, director of the Bureau of the Budget and Perkins McGuire, Assistant Secretary of Defense in the Eisenhower administration. Although under the overall supervision of the CIA, Doc Moor and his number two, Stanley G Williamson, were retained as chairman and president, respectively, to handle the commercial side of the business and, no doubt, to maintain a veneer of ‘respectability’.

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RANSA • CURTISS-WRIGHT C-46A COMMANDO. PHOTO: JW COLLECTION

Williamson, a former Navy pilot, had joined SAT in 1950 to help manage the business after working for Prince Alexis Obolensky’s short-lived Miami-based International Air Freight. Profits jumped to some $75,000 within three months of the CIA take over and the balance sheet soon showed assets exceeding $2.5 million.

In September 1960, SAT took over the MATS Inter-Island contract from Air America, along with two of that company’s  Douglas DC-6A Liftmasters. Over the next few years, several more followed. The four-engine propliners were used to operate between Japan, the Philippines, and Taiwan, and—from 1967—on the Booklift contract carrying the Stars and Stripes newspaper from Tachikawa and Yokota, Japan, to Korea. The SAT DC-6As also included missions to ‘Oak Tree’ (a code-name for Charbatia, in eastern India) in support of clandestine operations against Tibet.

YV-C-ERF • MIA Jul67 e300. PHOTO: JW COLLECTION

Together with a couple of DC-4s and DC-7C freighters, the C-46 fleet, now standing at five, soldiered on hauling cargo around the Caribbean and to South America until 1969, when the survivors were transferred to another CIA proprietary, Intermountain Aviation in Arizona. Two former SAT C-46s, suitably ‘sanitized’, provided logistical support to Operation Pluto, the ill-fated Bay of Pigs (Bahía de Cochinos) invasion of Cuba in April 1961. Another C-46 used in the operation later became part of the SAT fleet.

Three passenger-cargo convertible Boeing 727-100Cs, ordered by Air Asia, the Taiwan-based maintenance arm of Air America, arrived late in 1966. These were leased by SAT for routine Military Airlift Command personnel and cargo contracts out of Yokota and Tachikawa Air Bases, Japan. One of the 727s was leased to Civil Air Transport and was destroyed in a fatal accident on approach to Taipei in February 1968.

By September 1964 some $250 million ($2 billion) worth of military contracts had been diverted from US independent carriers to SAT and five other CIA-linked entities. Unsurprisingly perhaps, by 1967 SAT’s profits had risen to $1.68 million ($11.6m).

More modern heavy lift equipment, ideally suited to the Latin America region, began to arrive at the end of 1968 in the form of the Lockheed L-100 (the commercial variant of the military C-130 Hercules). While awaiting the ‘call to arms’, using its new four-engine turboprop freighters SAT soon developed a reputation for handling outsize loads—a hovercraft from the UK to Yellowknife, a complete street lighting installation from Brussels to the Congo, and a space capsule from Lockheed Martin Space Systems in Denver to Cape Kennedy. Another lucrative operation was the transport of jet engines for the Lockheed L-1011 TriStar and Boeing 747 production lines.

AIR AMERICA • C-123 • 1990. PHOTO: COLUMBIA PICTURES FRANK CONNOR CAROLCO

Toward the end of the Vietnam War, in 1972 Director of Central Intelligence Richard Helms ordered the CIA to divest itself of ownership and control of Air America and related companies. In line with this SAT was put up for sale, but unloading the airline proved to be a problem. When The New York Times broke the story in August 1973, the news immediately invoked a storm of protest from several legitimate airlines arguing that SAT had been built up with government money and received lucrative contracts, thereby representing unfair competition. As a result, SAT surrendered its Supplemental common carrier certificate to become a private contract operator, greatly reducing its value. Apart from which there were now only three aircraft remaining in its inventory. On December 31, 1973, SAT was sold to its long-serving president and CEO, Stan Williamson, for a reported $2.1 million ($11.1m). Doc Moor had died two years earlier, continuing to pursue his life-long love of competitive powerboat racing up until the day before his death.

The change did not end the CIA connection. According to the affidavit of Stephen L Crittenden, a former Army Special Forces, and Air America pilot, he was selected to front a new CIA venture, Crittenden Air Transport (CAT). Provided by a $20 million budget and five Fairchild C-123 Providers, the company, based in Bangkok, undertook its first clandestine mission in 1976. Shipments, allegedly comprising armaments and narcotics, were trans-shipped to and from Southern Air Transport aircraft at Manila and these transfers continued until 1978 when Crittenden received C-130s and a Boeing 707 to take over CIA-linked Pacific Rim operations.

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Meanwhile, in 1977 the CAB gave Southern Air Transport the authority to contract with the Department of Defense. The following year it received domestic all-cargo authority, and in 1980 was approved for worldwide all-cargo charters.

Southern Air Transport changed hands again in 1979, when James H (Jim) Bastian, a former director of Air America and SAT’s legal counsel through the CIA years, became the sole shareholder, taking over as president and CEO. Bastion became chairman in 1983, retaining his CEO title, and named William G (Bill) Langton, previously with another CIA contractor, Evergreen International Airlines, as president and COO.

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The Iran-Contra connection

Although Southern Air Transport’s connection with the agency had been revealed in the 1974 exposé, The CIA and the Cult of Intelligence, any link between SAT and the US government’s more questionable activities went largely unnoticed until 1986. But on October 5 that year, the relationship was blown wide open. A C-123K bearing a fake Panamanian registration was downed by a Sandanista SAM over Nicaragua. The sole survivor, Eugene Hasenfus, a contracted cargo handler, was captured and after interrogation admitted that the aircraft was on a covert mission carrying Soviet-made arms destined for Nicaragua’s Contra rebels. The aircraft in question was one of two, earlier flown by the notorious drug-running pilot and Medellín Cartel associate Adler (Barry) Seal, in a US Drug Enforcement Agency sting operation to Nicaragua. For this latest sortie, it had been leased from Doan’s Helicopter Service by CIA shelf company, Corporate Air Services, and paid for by a $300,000 check drawn on a SAT account, which also performed the maintenance. Moreover, one of the dead pilots was reported carrying SAT identification.

The resulting furor surrounding these revelations rumbled on for many years to become known as the Iran-Contra Affair, an undercover National Security Council ‘enterprise’ run by Lt-Col Oliver L (Ollie) North and his ‘fixer’, Maj-Gen Richard V Secord. The scheme was concocted to sell armaments to embargoed Iran in exchange for US hostages and use the profits to fund right-wing opposition forces in Nicaragua.

Starting in February 1986, SAT transported shipments of anti-tank weapons and Hawk missiles to Israel for onward movement to Iran, while its aircraft had been frequently seen at San Salvador’s Ilopango International Airport, a known transfer point for the CIA’s Central American operations.

Shortly after the shootdown incident, the FBI and US Customs Service began an investigation into the airline’s activities but were forestalled by pressure from North and his associates, as were Congressional investigations into SAT’s alleged involvement in the Iran-Contra episode. The airline’s PR machine had always strenuously denied any such complicity, but its claim for libel against a 1987 investigative feature in Newsweek magazine was denied by the courts, though they did not find widespread allegations of drug trafficking proven. A parallel action for defamation was brought against ABC over a 1987 TV program alleging collusion between SAT and South African cargo airline Safair—the source of several L-100s—in the movement of arms to Latin America. SAT, however, was forced to concede that on one occasion a chartered Safair Hercules had been involved.

SOUTHERN AIR TRANSPORT BOEING 707-323C • N8404. PHOTO: DENIS GOODWIN

Going legit

Southern Air Transport acquired a dozen L-100s previously flown by Transamerica Airlines after that company folded in September 1986. Rugged and reliable, the Hercules afforded SAT the reputation for being able (and willing, for a price) to haul loads into often otherwise inaccessible places. The Herc’s 6,000cu ft (170m³) and 50,000lb (22,700kg) payload led to SAT being the first airline to gain CAB worldwide outsize load certification.

Using this capability SAT transported helicopters, generators, and even a complete zoo from Florida to Bermuda, along with ‘just-in-time’ contracts for the automotive industry, principally Ford Europe. Other work involved palletized cargo, aircraft-on-ground movements, oil spill, and pesticide spraying operations. As one commentator wryly put it, SAT exchanged ‘guerrillas for gorillas’ when, in 1976, it carried the 40ft (12m)-high, 6.5t mechanical ‘King Kong’ for the Dino De Laurentiis remake of the famous film for Paramount. A decade later, another ‘king’ handled by the airline was Pharaoh Ramses II, movement of whose treasure was entrusted to the airline during US and international exhibitions.

From the mid-1980s SAT’s Hercules fleet was also a familiar sight in many of the world’s conflict hotspots, especially in the troubled Horn of Africa, Angola, Mozambique, Rwanda, and famine-ravaged Ethiopia. To overcome the problem of washed-out airstrips in the rainy season, SAT developed an effective pallet airdrop system, delivering the cargo from altitudes as low as 700ft (200m).

While these operations were associated with humanitarian aid organizations such as the United Nations, Caritas Internationalis, and the International Red Cross, a contract with a diamond mine in war-torn Angola aroused widespread speculation that the airline was still in cahoots with its former owner.

Such missions were not without hazard. In September 1991 a Herc was written-off after striking a land mine while taxiing at Wau, in Sudan, fortunately without a fatality.

In 1985, SAT became the first cargo airline to offer aircraft, crew, maintenance, and insurance (ACMI) contracts. Boeing 707-300Cs were acquired for operation on behalf of BAX Global and CF AirFreight, and wet-leases to carriers such as Ethiopian Airlines, LAC Colombia, and the Swiss-Soviet Metro Cargo Airlines. By 1991 these varied activities brought in annual revenue of $150 million ($253m).

Change of direction

Since its early days, Southern Air Transport had been a prominent contractor to the US Air Force LOGAIR (logistics airlift) and US Navy QUICKTRANS networks, which occupied half the Hercules fleet and accounted for 30% of total revenue. As part of the Civilian Reserve Air Fleet (CRAF) the airline played a significant part in support of Operations Desert Shield and Desert Storm in 1990-91, with SAT 707s flying regularly between McGuire AFB, New Jersey, and Jeddah and Dhahran, Saudi Arabia. This involvement culminated with 707 ferrying doctors and medical equipment into the newly liberated Kuwait International Airport in March 1991.

This profitable business began to wane in the mid-1990s after significant cutbacks in the defense budget were instituted by the Clinton administration. Nevertheless, attempts at diversification were already underway with delivery in February 1991 of the first two of six Douglas DC-8 Series 70 freighters as part of an effort to capture a greater percentage of the US freight forwarder and overseas wet-lease markets.

A joint-venture was established in January 1993 with the formation of Polar Air Cargo in conjunction with aircraft leasing company Polaris, a subsidiary of General Electric Capital Services, and California-based NedMark Transportation Services. Polar lifted off in May 1993 using a couple of 747s, initially on charter work. Within a few months, several more aircraft allowed the initiation of east and westbound scheduled routes linking New York with Hong Kong.

SAT pulled out of the partnership in March 1994 to develop its own cargo business with 747s, the first appearing in summer 1994. Customers included Atlas Air, China Airlines, Emirates, KLM Royal Dutch Airlines, Lufthansa, and Varig. Although the overall cargo market had grown by more than 50% in the preceding decade, the number of new companies offering tailor-made contract and leasing packages had also increased.

After moving in 1995 from Miami to Columbus, Ohio (although SAT became a Nevada corporation), toward the end of the decade the burden of new equipment costs and increased competition led to financial problems. Proposed acquisitions by Fine Air and Kitty Hawk failed to materialize after a buyer for the L-100 fleet could not be found, and Southern Air Transport ceased operations on September 25, 1998. On October 1, with liabilities of $101 million ($150m), SAT filed for Chapter 11 bankruptcy protection.

Eventually, the L-100 fleet was auctioned off to Transafrik to pay major creditors. During the bankruptcy proceedings, it was discovered that the proceeds of a sale of a Southern Air Transport subsidiary, SimuFlite Training International, had been retained by the Bastian family (Jim Bastion died shortly after the collapse of the company). Several million dollars was eventually recovered and paid to former SAT employees.

Transformation

Out of the ashes arose a new Southern Air. In February 1999, SAT’s  remaining assets were acquired by a Connecticut investment group known as Devon Partners, which included several former SAT managers. In an effort to secure SAT’s certificate and authority, a joint filing was made to the Department of Transportation in the names Southern Air Transport and Southern Air. The DOT, however, declined the transfer application and instead issued a new certificate in November to Southern Air for interstate and foreign cargo charters. Southern Air took off early in 2000 with a 747-200F employed on an ACMI contract for Lufthansa Cargo.

Surviving a post-September 11, 2001, Chapter 11 reorganization, Southern Air expanded, being acquired in 2007 by Oak Hill Capital Partners and merged with its Cargo 360 airline. Older 747s were retired after Southern Air took delivery of 777Fs.

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SA 747 N400SA LAX 1-17-14 100. PHOTO: ED PASCUZZI

Southern Air’s holding company entered Chapter 11 in September 2012 with debts of $285 million, citing defense cutbacks as a major factor. The restructured company emerged from bankruptcy protection in April 2013 and is now based at DHL’s hub at Cincinnati/Northern Kentucky Airport.

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Maurice Wickstead

Maurice Wickstead

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7 Comments

  1. Jetjack74
    Jetjack74 July 18, 21:03

    Is there any relation between Jim Bastian of Southern Air Transport and Ed Bastian of Delta Air Lines?

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