The airline industry these days resembles an executive-suite version of The Matchmaker. Pan Am is flirting with Eastern Airlines and has an eye on Braniff. Northwest Orient last week won permission to take ailing Northeast for better or worse but lost the dowry it had expected. The Civil Aeronautics Board ruled that Northeast's Miami-Los Angeles route was not part of the arrangement—which consequently could fall through. Meanwhile, American and Continental were both vying for Kirk Kerkorian's Western Airlines, and American took over Trans-Caribbean, which flies between the East Coast and some Caribbean points.
The airlines' sudden coziness reflects the fact that misery not only loves, but often needs company—and 1970 was a miserable year. Pan Am and seven of the eleven domestic trunk lines lost a total of at least $125 million during the year. The nine regional airlines collectively lost another $50 million. Only four big lines—Eastern, Continental, Delta and Northwest Orient—showed a profit, mostly because they had the good luck to have busy routes, and made the most efficient use of their planes. Airmen argue that mergers will increase efficiency and reduce costs, and the Nixon Administration seems favorably disposed to the aerial matchmaking.
To save money now, the carriers have been wielding the personnel ax. Last year they laid off 9,000 people, and they expect to fire more this year. Pan Am announced last week that it plans to sack another 1,800 in the near future, including some pilots. The airlines have also reduced their service. Last year 658 flights—5% of the nation's total—were eliminated. Trans World Airlines, which lost $65 million, has replaced two 747s on its Chicago-Los Angeles run with one 707, at least for the winter season.
There is even a move afoot among the lines to charge first-class passengers for drinks. And the airlines have asked permission from the CAB to raise their fares by 10%. Higher fares may discourage even more people from flying, but the industry is in such straits that permission will probably be granted.
http://www.time.com/time/magazine/article/0,9171,942482,00.html
