Reno Air Names Chief Executive

Badly lagging the airline industry’s strong performance, Reno Air Inc. on Friday replaced its chief executive, as the regional carrier posted another loss, this time a $12.4-million deficit for the fourth quarter.

Saying it was time for “a change in leadership,” Reno said it hired former United Airlines executive Joseph R. O’Gorman as president and chief executive to replace Robert W. Reding, who resigned.

O’Gorman also was named chairman to succeed Lee Hydeman, who became chairman of the board’s executive committee.

Reding, who became chief executive in late 1994, helped pull the Reno, Nev.-based carrier out of severe financial problems at the time. But during the next three years, the airline struggled to carve out a route system in the West that provided strong and steady revenue and earnings growth.

Constant competition from Southwest Airlines, United’s Shuttle by United, Alaska Airlines and other carriers caused problems for Reno, whose 22 destinations include Los Angeles, Orange County and San Diego. The shortfall became more glaring as the rest of the airline industry enjoyed prosperity.

Reno’s fourth-quarter loss, which compared with a $6.3-million loss a year earlier, came on a 7% increase in revenue to $91.6 million from $85.4 million. Reno blamed part of the latest loss on higher costs, including increased expenses for maintenance, reservations and labor.

Reno also lost $12.4 million for all of 1997, compared with profit of $2 million the prior year, and its annual revenue rose to $383.9 million from $350 million.

O’Gorman most recently was an executive vice president at United, the primary unit of UAL Corp., and earlier he was chief executive of Aloha Airlines in Hawaii and Frontier Airlines.

In response to the executive shuffling, Reno’s stock climbed 75 cents a share, to $6.19, on the Nasdaq market.