It is an all too familiar story - another regional airline is forced to sit on pins and needles as its major network partner files for bankruptcy.

If there is a regional expert in this scenario that exemplifies resiliency, it must be Trans States Holdings. The parent of Trans States Airlines has weathered the bankruptcy proceedings of its major partners six times in its 23 years of operation.

"We are the most qualified to deal with a bankruptcy. We have done it more than anybody else," said Richard Leach, president and chief operating officer of the privately held St. Louis carrier. The scorecard: TWA, three; US Airways [UAIRQ], two; and United Airlines [UALAQ], one.

For his creativity and leadership during these trying times, Leach has been selected by a panel of independent judges to be the 2005 Regional Aviation News Regional Airline Executive of the Year. Leach will be honored in Cincinnati on May 18 at the annual Regional Airline Association (RAA) convention.

"This is an airline that has weathered all the changes of a partner airline effectively," one of the judges said. "Trans States has held on. It has been pretty creative responding to all the various changes and it has continued to be profitable."

Trans States initiated one of its more creative tactics last year when it formed a second airline, GoJet, under the Trans States umbrella. GoJet is scheduled to start flying Bombardier [BBD] CRJ 700s for United in August. Scope clauses at American Airlines [AMR], Trans States' largest partner, forced the formation of GoJet.

Trans States, which has been owned by Hulas Kanodia, its chairman and CEO, since 1986, posted a 43 percent growth in revenue in 2004 to $300 million. Its capacity, as measured by available seat miles (ASM), grew by 67 percent to 2.2 billion ASMs. The only year that Trans States was not profitable was in 2001, said Leach, who joined the carrier in 1988.

In a wide-ranging interview with Regional Aviation News, Leach talked about working with bankrupt partners, his plans for GoJet and his management style.

"The relationship between a partner and its regional, if it's used to the limits of the value that it brings, is terribly intimate. It brings good value to both. It should be seamless in every way that it can be. If that is done in good times and bad times, that is great. When it comes to the times the major partner is stumbling, it is more important for us to do what we do well - that is bring a quality product. They need to show to the public that they are still a quality, safe airline and that they will not divert on those issues."

Leach said his team tries to make every decision throughout the day focus on three factors: quality of the product, safety and costs.

"You have got to bring value in your cost structure. You need to be extremely low in costs with what you provide. When [the major carrier's managers] need you to be flexible, they need your help in various ways. You need to be extremely flexible. We need to be able to respond very quickly."

Keeping operations simple, low-cost and flexible are part of Trans States' core values, Leach said.

"The way we have grown up and learned how to be a successful airline was under the umbrella of TWA. We always had to operate as if tomorrow we may not have an airline to feed - even during the good times. Everything [here] is based on cost-effectiveness and needs of necessity, not out of the desires of wants. So today most of the other regionals are now experiencing the environment we grew up in. We are now one of the best-suited to provide support and services to our partners. We are realists. Our focus is solving the problems for our major partners."

One of Leach's mantras is, "Nothing is impossible."

"You have to be creative to make fixed costs flexible," he told Regional Aviation News. "We have to think outside the box. If you make a decision that takes a wrong turn, don't be afraid to turn around and go back. Don't let your ego get in the way. As a private company, we are able to maneuver very quickly. We can duck before something hits us in the face.

"We don't have a revenue problem today - it is what it is. The market will decide what they are going to pay. The market has gotten cheaper fares - in our case almost 30 percent cheaper. We have had to figure out how to operate in that environment.

"We get our employees to focus on doing a good job that our partners find value in. Our employees know that when times are tough, they know that the way to be successful and to have a job tomorrow is to put forth the best quality product we have. They also know - and fully understand - that in providing a quality product, you are saving money. I don't want them to sit around and wring their hands about US Airways and United, I want them to do their job and leave the rest to me. I try to protect them from the headaches and worries. We show them that their quality product has created opportunities for Trans States."

Since United entered bankruptcy in December 2002, Trans States has signed on as a new code-share partner flying 20 Embraer [ERJ] 145s. It has expanded that relationship with the formation of GoJet to fly 10 70-seat Bombardier CRJs, which will take over some routes currently flown by Air Wisconsin.

GoJet is being formed out of necessity. While discussing additional flying for United on larger RJs, Leach said it became apparent that a contract with American Airlines precluded Trans States Airlines from flying any aircraft larger than 50 seats for any other carrier. "Quite frankly, this caught us off-guard," he said. "We did not believe the scope restrictions were that far-reaching. Our job is not to bring problems to the feet of our partner, but to bring them value. The only solution was to fly under another certificate totally separate from Trans States."

GoJet will be the second carrier under the Trans States Holdings umbrella. It will have an operational team separate from Trans States Airlines.

The creation of GoJet has provided the company with the opportunity to promote internal growth.

"We are very blessed to have talented folks willing and able to take on the venture," Leach said. "We have moved talent around, which gives other people opportunities to move up into more responsible positions. We are very well pleased with the new team, which in no way has weakened our team at Trans States."

With the formation of GoJet, Trans States has decided to fly Bombardier aircraft for the first time. The carrier had been flying 48 ERJ 145s only.

"It was a 100 percent economic decision," Leach said. "The ownership costs and operating costs are cheaper on the CRJ 700. At the end of the day, it is the more economical 70- seat plane to operate. We tried to get Embraer to compete with its Embraer 170, but at the end of the day, they could not. United likes [the CRJ]. It is acceptable for them. Is someone going to pay more to fly on the 170 and make up the difference? The answer is, 'No.' "

Trans States is still flying 23 Jetstream 41s for American and US Airways. With the leases terminating next year, Leach likely will decide to return the planes. "For the last four years, the turboprops have been very challenging. With the fares and the environment, it has been a drain on the balance sheet."

However, Leach is not ready to close the door on turboprop flying. "Many of the markets we now serve may not have service without the turboprops. We are evaluating the situation to see if there is a size of a turboprop fleet that makes sense to move forward with on economic terms. The ownership costs or lease rates need to make sense. If the math does not work out, the aircraft will go back," he said.

As a private company, Leach said, managers can make decisions on the fleet swiftly - without extensive board debates or the formation of task forces. "When I am making a decision on acquiring an aircraft, I can make the deal on the spot. We have added 36 airplanes in the last two years. We have been able to find the money we need. We have been creative. We have been able to obtain these planes at the cost levels very competitive to our public counterparts. We have been able to weather the challenges to get capital. We have never missed a payment in our history. We have never had to ask for reduced payments."

Serving as Trans States COO since 1998, Leach is in daily contact with the semi-retired Kanodia. "We spend a lot of time talking about big picture stuff - the changing landscape, the opportunities in the turmoil. I know what he values. I know how to manage his company for him. He lets me run the company day-to-day, and has let me do that for many years."

An 18-year veteran of Trans States, Leach looks upon Kanodia as his mentor. "I really grew up in the airline business with him, under his mentorship. Hulas is a smart guy who knew nothing about the airline business. He became a student of the business."

Leach described his management style as participatory. "We are all part of a team. Every position has a role to play. I don't want [employees] to see me as having a more important role, just a different role. I try not to get terribly impressed by my position."

"Rick Leach is a real good guy. A real capable guy," said Frank Jay of the executive search firm of Frank Jay & Associates, which specialized in aviation placements. "He is personable and a good communicator. He does a good job leading and managing. He is the kind of guy anybody would want to be around."

Leach still lends an extra hand at the St. Louis airport on busy holidays. "I love the environment and excitement of the airport."

>>Contacts: Richard Leach, Trans States, (314) 222-4300; Frank Jay, (281) 359-9040.<<

Trans States Holdings At A Glance

• Umbrella Company: Trans States Holdings
• Operating Carriers: Trans States Airlines, GoJet Airlines
• Headquarters: St. Louis