WEDNESDAY. JULY 87. 1980
MEDFORD MAIL TRIBUNE. MEDFORD, ORE.
.B 5
Airline Companies Described
As 'Cautiously Optimistic'
Br ROBERT J. BEBLINO
Unllid Press International
WlinlilliKlcin - llll'll - WhulH
wronK wllh Iho nil linen? Arc
thoy in bud nlf (Iniuu'liilly un
ri'cciit itlorlt'H would Incllciilc?
Iliivo llii-y ttvrr rxU'iidi-d
tlic-mndves mnvlnii Into Iho
Jpl-iiKr?
The fiilliiwlnit ( itcn 1 1 oiik mid
iimwiti, liimi'd mi Intnrvlews
with li'iidhiK ulrllnc ccoiiinnlo
CxpvrtH. lull whiilii wroiiK -mid
wlint' rlKht with the nn
tlon'i moot dynumlc Indtmlry:
Q.-How bad oil ere the air
lln.iT A.-Nut in broke, hlinknipl
mid iKilhered na norno praal
Dilate hitvtt hecil aiiylnK. It la
true thvy luivo been ImvliiK
trouble. They ot $24 million
III llirt flr.it (iiiiirtt-r n( 1110(1,
they lire riivply In hnck on
purclmsi-a nf new Jel pnwercd
pliuira mid aomo of them -audi
na C'npltnl mid Norlhciisl
- are up to their wlnif tlpa In
red Ink. lilt thla la purely a
ono dlmenaliiniil picture of
gloom. 'Hie airlines iilao hnvc
a pint mid future na well na u
present, and the tbree illnien
alonnl picture la nut nearly na
durk for the following rca
ona: It ia a fuel that In 1051),
only one trunk or nuijiir air
line operated lit n losa: North
enal. Kven nfter cnnslilerluil
Interest on debta, tnxea mid
other spocliil llema, only threo
cnrrlera loat money. Northeast,
Cnpltnl mid Continental. The
poor first quarter perform
ance this year wns due par
tially to the fnuleat weather in
yeara.
-The Airlines traditionally
hnvc had toiiKh sledding in a
period of major equipment
purchases. They had It In the
pnst-wnr years when they
were ttuyiiiK new DCO'a nnd
Constellations. They nre linv
Inn It again In trying to fi
nance Jcta and prop jeta that
cost as much ns $11 million
per plane. Actually, they have
done n far better Job In plan
ning their Jet financing than
they did 111 the post-war new
equipment splurge.
-They hnve something going
for them Hint some pesslmlsU
aeem to hnve overlooked: The
recent fare Incrense approved
by the Civil Aeronnutlca
Board (CAD) that la supposed
to gunrantee them n fair rote
of return on their mnmmnth
Investment, provide atablllly
and assure more flexibility In
setting fares.
Q.-How important Is that
far boost?
A.-All important. For one
thing, the 10 per cent rate of
Investment return the CAM
has promised marks the first
time the airlines have been
considered as nn individual
utility with Its own specific
economic problems. In the
pnsl, the government baa con
cocted a rnte of investment
return from factors which
were applicable to such utili
ties ns railroads nnd electric
companies, but not necessnrlly
to nlrllnes. To put It briefly
nnd bluntly, the mnln reason
the nlrllnes nre having fi
nancial hendiiches is because
their fnrc structure hns been
too low for many yenrs.
Q.-Do the airlines blame
most of their current troubles
on the CAB'a taking five
years to decide on a rale In
crease?
A.-Tlicrc. Is aome Industry
resentment nnd bitterness.
But the majority of cnrrlcrs
concede Hint it wasn't any
overnight problem. The fac
tors involved were enormous
ly complicated, nnd It's often
forgotten Hint the hcnrlngs
which begun In 1053 were for
Hie purpose, of determining
whether (me dereases were
needed. Another reason for
the long deluy was the per
sonnel turnover on the board
Itself, Kveryllme now mem
ber wns appointed, be had to
go over the whole record
again, And there hnve been
three new members appointed
In Iho last few months alone,
Q.-Ar the JiiIb causing the
airllnas' financial troubles?
A.-Only In the sense that
lliey nro so expensive to buy.
Mill blaming the Industry's
headaches on the Jets Is gross
over simplification. Despite
their slr.o mid complexity, the
Jets are cheaper to fly nnd
maintain thnn uny other nlr
craft In history. Their engine
reliability is fantastic, as
much ns 20 limes superior to
piston engines. TWA and
American figure their Hoeing
7U7's hnve n seal-mile cost 40
per cent below DC7's nnd
Constellations. Contln e n t a 1
claims It can make money on
n Jet that's only hnlf-fiill. One
survey showed that Jetliner
In one day can gross more
thnn $30,000 - enough to pny
for crew salaries, fuel, amor
1 1 z n 1 1 o n, deprecintlon, ex
penses of ground facilities, In
surance nnd Interest with
enough left over for n profit.
Jet load factors (pcrcentngc of
seals occupied) aren't ns high
lis they wero In the first yeor
us the airlines ndded more of
the big planes to tliclr routes.
Competition has been bitter
on duplicated routes. But gen
erally speaking, the Jets nre
money-makers and they are
getting people to fly who hnve
never flown before.
Q.-What about these so-called
duplicated routes? Are they
a major cause of red ink?
A. - To a certnln extent.
President C. li. Smith of
American says bluntly there
Is to much competition on
many routes, nnd ninny In the
Industry ngree. But the nlr
llnes asked for the routes to
begin with. Tliclr chief trouble
Is not too much competition
but simply not enough cus
tomers. Nearly 33 million pas
sengers flew on scheduled
U.S. airlines last year, hut the
statistic Is misleading. Actual
ly only 12 million Individuals
flew, with enough of them
making sufficient flights to
rench the 53 million totnl.
Only n small portion of our
population hns ever been in
nn airliner - s significant item
because It shows there is
vest untnpped market which
must be educated nnd sold on
air trnvel.
Q.-Is it true that on big diffi
culty has ben th airlines' in
ability to mak money . on
short-haul routes serving cities
with low traffic potential?
A.-Very true. The airlines
nro forced to serve ninny com
munities which don't generate
enough business to mnke such
service profllnblc. There Is n
decided trend to turn some of
these routes over to the sub
sidized locnl service nlrllnes.
It is n much more pronounced
trend, by the way, thnn merg
er which many economists be
lieve hns been "oversold" ns
a cure - all to Die airlines
troubles. '
O. - What are the airlines
doing about getting rid of
their old piston-engine planes
as they acquire new Jet-powered
equipment?
A.-Thls is n king-sized bend
nche, but not of the propor
tions mnny airline economists
fenrod. First, much of the
older fleet hns been fully de
precinted nnd amortized. Sec
ond, such hnrd to - peddle
planes ns the DC7 nnd Super-
CuiiHlellulinn are lining con
verted Into cargo plunes-und
Iho nlrllnes actually nro short
of equipment In this fast-grow
ing category. Third, there Bit 1 1
Is a hefty market for the nlr
llnes' twln-cnglna fleet (Con
vulrs and Martins) among the
local carriers operating DC3's.
While It Is truo the latter are
buying the smaller new prop
Jets like the K-27, they can't
afford 100 per cent conversion
to Jet power lit present nnd
still need DC3 replacements.
Q,-Ar th airlines them
slvt optimistic?
A. -Cautiously optimistic Is
Iho best way to put It. They
realize the Jet age bus brought
many problems, but for the
reasons cited above they be
lieve they can bo overcome.
They arc encouraged by the
fact thut traffic volume In
1050 Jumped by seven million
passengers over 1058. And
they point to the experience
of ono nlrllne - United - ns
proof that capable manage
ment nnd solid planning can
surmount serious obstacles.
United didn't start Jet service
until September, 1050. For
most of thut year It pitted its
DC7s against TWA'i and
American's new Jetliners on
the plush transcontinental
routes. TWA and Amerlcnn
mndo money, but so did Unit
ed - nn achievement which
surprised the entire Industry.
David Fooie Now
In Washington, D. C.
David Louis Foote. rout 1,
box 557 f'entml Pntnl ar
rived in Washington, D.C.. re
cently with about 100 other
top teen-ngc lenders from nil
over the U.S. to tnke part In
uie nuth annual Boy's Notion
program of the American Legion.
Koote was elected Senator
at the Oregon Boy's Suite ear
lier this summer In Snlem. He
will attend the
ernmental study symposium
ii'iy ii to juiy zg.
Boy's Nation Is the largest
youth program of Its kind.
conepntmliiiu nn an - . 1
. . n . i uiHsinim
study of the functions of the
ivm-i.ii Kuvcrnmcni. wnnc In
Washington thn ... ... nnK
tors will conduct a simulated
nnuonnt senate. They will
ienrn "by doing" how Uie ma
chinery of tho elected govern
mental machinery functions.
Squares Wear Socks,
Says Teen-Age Panel
Oxford, England n?PD - A
panel of four teen-agers told
an Oxford university study
group Tuesday t h n t while
"squares" nre "mostly adults
who do not understand the
lei-n-ngc way of life," there
are also teen-ngc squares
who wear socks until they
nre 17."
Make Your Yard
less Work- More Fun
WITH A
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Does a eloan, fait job . . profes
sional edging along walks and
flower beds. A well groomed yard
putt the fun In outdoor living .
and It't easy with SI LEX!
CHARGE
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$0095
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IMCMWITf IN HOMIWAJtfSf
245 S. Central at 10rh Phone SP 2-5201
OSCAR WINNER DIES
Hollywood IWD-Ccdric Gib
bons, 65, former hend of the
nrt department nt Metro-Gold.
wyn-Mnycr nnd winner of 11
Aendcmy awards for art di
rection, died Tuesday at his
home in West wood after a
Ions illness.
Court Records
DISTRICT COtTRT
Dennis Troxel, Phoenix, driving
under influence of liquor, $aoo.
David H. Redmond, Improper
miiuirr, o.
Paul E. Scott, excessive over
hnnafnt lond. SIS.
W niter G. Garner, no beam Indi
cator. S10.
Warren C. SkogR, violation of
batlc rule. $13.
Ma I hew J. Wlnninsham, over
heleht. SIS.
Jtidsen D, Bailey, failure to dim
I in mi. sia.
Marvin M. Hurley, no operator'!
license, sa.
Charles J. Crlit, failure to atop,
SIS.
JameH R. Dnvii, driving while en-
cumnorea, 7. nu.
Edwin Andrew 01 sen, excessive
overhnnslna load. 115.
Ilnrry C, Webber, failure to atop,
Bonnie H. Miller, Improper muf
fler, sin.
David W. Hunter, refusal to weigh
toad. 913U: no oversize permit,
overload. SHU.
Raymond L. Rldder, no operator's
ii een sc. a.
Larry L. Younsr. overwldth. Sill
A. C. Dyer, no vehicle license, IS,
Harry L, Cole, parking on high
wav. S15.
Harold W. Chapman, overheight,
SIS.
Robert J. Zimmerman, violation of
bas e rule. sin.
Frank L. Moore Jr., Inadequate
orn it es, 911).
Alexander A. Smith, no born, $S,
Robert J. Rohl. overwldth. SIS,
Vivian R, Galloway, failure to
sinn. $15.
David H, Peterson, obstructed
vision, 10.
Ivan R. Myers, overload, $02.
CIRCUIT COURT
nettle Ford Salo vs. Roy H. Salo,
divorce decree
Bertha F.. Lea vt, Robert R. Lea,
divorce decree.
Janet Llddetl vs. G. T, Llddell,
divorce decree.
Lola E. Houser vs. George R,
Homer, divorce decree.
Doris Darleno Holcnmb va, Jacob
E. Hn rnmh. divorce decree.
Rachel Faye Standley vs. Charles
u, aiamtiey, divorce decree,
MAHIMAOH MCRNNK
AI'l'UCATIONS
Robin Ames Blnns, (107 Sherman
st Medfnrd, and Nancy Jeanene
tin n .mem Icy Robinson, route 1, box
2iia r.nirf inn.
Edward J. Dlerauf Jr.. New Jer
sey, and Verity Louise Day, Berke
ley, uaiu.
Car I Friincls McQuisg. Grants
Pass, and Lois Rarlene Adams, 740
Park st., Asmand.
Stanley Thomas Perisho. New-
berg, and Mnrela Shlrlene Swisher,
aiso oi newnerg.
Aflllf.ANII MUNICIPAL COURT
Joseph Aaron Roberts, excesslva
venicio noise, urea, 4u,
Stephen McNalr Cummins, violat
ed basic rule, $20,
William nichard Snyder, txcei
ivj nolit, 120.
117 S. CENTRAL SP 3-7301
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