California Pacific Airlines (San Diego McClellan Palomar) is close to being sold to Los Angeles-based private equity group Paragon Partners, which plans to recapitalise the regional airline with an additional USD35 million, weekly newspaper The Coast News has reported citing a statement by Paragon.
The negotiations are to acquire majority ownership in the airline, which is more commonly known as CPAir, and include taking on its debts, reported in February to amount to at least USD10 million, as well as transfer of stock and cash considerations.
Operations would start with one 50-passenger E145 and one 70-passenger E170, with flights estimated to phase in within six months.
The reborn CPAir would eventually operate five aircraft to connect San Diego McClellan Palomar with six western cities, San José, US, Oakland International, Reno/Tahoe, Sacramento International, Phoenix Williams Gateway, and Las Vegas Harry Reid.
The company projects first-year operating revenues at approximately USD70 million, rising to more than USD100 million the following year, according to the Paragon statement.
The acquisition group is chaired by Robert Nisi, a securities attorney and investment banker who served as corporate director of Virgin America (San Francisco) from its start-up phase in 2005 until 2009. Virgin America founder Richard Branson is also part of the founding team, Paragon said. If the deal is completed, Nisi would be named chairman and chief executive of CPAir.
California Pacific was founded in 2009 by entrepreneur Ted Vallas but only launched operations in 2017 after it acquired ADI Aerodynamics (Pontiac Oakland County International). Prior to that, it had failed several attempts at securing an Air Carrier's Certificate (ACC) from the US Federal Aviation Administration (FAA). It then ran a fleet of four E145s on scheduled flights out of Carlsbad, which ended in December 2018, as well as essential air services from Denver International to Watertown, SD and Pierre, which ended in January 2019.
