Business Notes Airlines

The race for passengers and profits in the deregulated airline industry claimed another victim last week when Northeastern International Airways filed for bankruptcy. More than 200 stranded passengers angrily demanded refunds at the airline's Fort Lauderdale ticket counters. The move followed staff cuts, canceled flights and missed paychecks at the company.

Started in 1982 by Stephen Quinto, 49, a Florida cargo pilot, Northeastern began with one aging DC-8 that ferried passengers between Fort Lauderdale and Islip, Long Island, near New York City. In two years the airline expanded to 17 destinations, including Chicago and Los Angeles, mostly by undercutting prices charged by its larger rivals. But Northeastern faltered in an ensuing fare war, when it could not raise enough capital to provide the airplanes it needed. Immediately after filing for bankruptcy, Northeastern began calling itself the New Northeastern Airline and selling tickets on its five most profitable routes. In 1983 Continental Airline declared bankruptcy and then successfully survived as a smaller, low-cost carrier. Airline Industry Analyst Jordan Greene of Miami, however, does not give Northeastern much chance of doing the Continental.