At the same time, though, the all-cash offer may have hobbled the improbable dream that Robert L. Johnson would become an aviation executive. Johnson, founder, chairman, and CEO of Black Entertainment Television, was picked to acquire the D.C. assets by US Airways Chairman Steven M. Wolf last April as he negotiated the sale of his company to UAL. For $141.2 million, Johnson would buy enough takeoff and landing rights at the Washington airport to support a 222-flight-a-day airline serving 44 cities.
Never mind that Johnson, 54, has absolutely no experience running an airline. US Airways and UAL contend that by selling to Johnson, they will create a brand-new regional carrier, DC Air, and answer critics who charge that their $11.6 billion merger will cut competition. DC Air would become the only carrier in the nation owned by an African-American. And they would be handing it to a proven entrepreneur: Johnson launched the Black Entertainment Television cable channel in 1980 with just two hours of weekly programming; today, it has 60 million subscribers. And Johnson is known to dabble in various businesses, such as restaurants and web sites.
ON A STRING? Good selling points, to be sure. But from the moment the deal was proposed, DC Air drew flak from competitors, lawmakers, and consumer advocates who see it as a thinly disguised puppet of UAL. DC Air would lease its biggest planes--10 Boeing 737s--from UAL at market rates for four years. And for as long as seven years, UAL would supply the airline with United flight, maintenance, and airport personnel, market-rate fuel and insurance, and other services. DC Air passengers would even earn points on United's frequent-flier program. ''A virtual airline,'' scoffs Democratic Rep. Louise M. Slaughter, whose upstate New York district would be in DC Air's territory. Johnson did not comment.
Investors also have objected. Accusing Wolf of cronyism--Johnson is a US Airways director and was the only buyer the airlines sought out--shareholders have hit US Airways with eight lawsuits to try to force US Airways and UAL to auction off the assets. Wolf and UAL chairman and CEO James E. Goodwin say in recent interviews that the pact with Johnson bars them from talking with anyone else, so they've given Continental the cold shoulder. They also insist the deal creates new competition for everyone. But analysts suspect that UAL prefers Johnson because once stuck with high-cost crews, he would have a hard time undercutting United's fares.
So far, only Continental has made an offer, Wolf and Goodwin say. But analysts foresee a furious bidding war if the takeover is approved. There simply is no other way to get gates and landing rights at Reagan National Airport, a crucial stop along the heavily trafficked Northeast Corridor. Analysts say American Airlines and Delta Air Lines could ante in, and even some startups.
Could DC Air come out on top in an auction? Though he's had more than five months, Johnson hasn't lined up any financing. But he could soon. Viacom Inc. ( VIA.B) reportedly is in talks to buy BET Holdings II Inc., the cable channel's parent. Johnson's take if that deal closes may approach $2 billion. That could allow Johnson to up the stakes on Bethune. But it wouldn't necessarily give consumers an independent alternative to United.
