From the front office
Piedmont Aviation, Inc., and 1975
To all airline division employees:
This year, 1975, has been a year of trial for the entire air trans
port industry, with high fuel costs, a recession, inflation and, un
happily, some furloughs in our work force. I am taking this method
of letting each of you know, from myself and your senior officers,
what the facts are concerning your Company’s response to these
challenges in order to provide the answers to the questions most
frequently brought to us.
Last year, 1974, showed us we could handle unexpected work
loads. They turned out to be happy loads. We had lots of traffic,
and we made a good profit. There were times when it didn’t look
like it was going to be a good year. We had some inklings of the re
cession and a fuel embargo started in the Middle East. We couldn’t
predict how much fuel we were going to have from week to week.
Nevertheless, our team pitched in and we had the most profitable
year in the history of our Company. Unfortunately, 1974 ended
with the beginning of the recession, as indicated by our traffic
slump in October, November and December.
Our record for the past 28 years has shown our capability. We
have constantly been among those airlines demonstrating the low
est number of customer complaints to the Civil Aeronautics Board;
we have show’n steady growth over the years. We have consistently
been among the leaders in passenger load factor and operating effi
ciency. All in all, we have a great team.
So far, 1975 represents one of the greatest challenges in the
history of Piedmont. We are confronted by an unusual coincidence
of events new to all industries in the United States. For example:
We are having a recession, but at the same time we have infla
tion and a high cost of money borrowed. We are having high unem
ployment in the country, especially in our area. While the cost of
most things has risen to new heights, our fuel cost is almost three times
what It was in 1972. There is a current wave of regulatory reform move
ments in the federal government that leaves many people in the financial
community, and in the aviation community at large, with a feeling of
insecurity about what the future might hold. All of this is reflected
in the market price of airline stocks and in the difficulty all industries
are having in raising capital by selling stock, even if they have record
earnings.
(continued on page four)
September/October/November
1975
Vol. XXVI, No. 4
Third quarter financial and traffic reports show improvement
The Company reported a profit of $1,379,647,
or 56^^ per share, for the third quarter of this
year.
Passenger traffic during July, August and
September was 6 per cent more than during the
second quarter in spite- of the fact that aircraft
miles flown were down about 2'/-> per cent. While
this growth is encouraging, profits are still
considerably less than they were in the third
quarter of 1974 when the Company earned
$3,125,120 or $1.27 per share.
For the first nine months of 1975 Piedmont
Aviation, Inc. reported a loss of $993,342, or
40^ per share as compared to a profit of
$6,916,675, or $2.81 per share last year.
Gross revenues increased 9 per cent from
$41,405,449 in the third quarter of 1974 to
$45,112,829 for the same period this year. For
the nine months, gross revenues were up 4 per
cent in 1975 to $124,443,264 from $119,986,593
last year.
Costs and expenses rose 17 per cent in the
third quarter, from $37,097,448 last year to
$43,279,459 this year. For the nine month
period, costs and expenses were up 14 per cent,
from $110,691,117 in 1974 to $125,745,960 this
year.
The third quarter’s improving traffic trend
continued through October. For the second time
this year the percentage of available seats sold
was greater than in the same month a year
earlier.
September marked the first time. Then dur
ing October, 1975 the passenger load factor was
53.05 per cent with boardings of 331,870. In
October of 1974 the load factor was 50 per cent
on boardings of 332,941.
Revenue passenger miles flown during Octo
ber of this year totalled 96,749,276, up 2.05 per
cent from 94,808,169 in the same month a year
ago.
For the ten months of 1975, revenue pas
senger miles were 875,668,109, down 5.91 per
cent from the 930,654,181 miles flown during
the comparable months last year.
The passenger load factor through October
of this year was 49.05 per cent. For the same
period last year it was 54.46 per cent.
Passenger boardings through October to
talled 2,992,263, down 8.08 per cent from the
3,255,185 carried during the first ten months of
1974.
Last FH-227 flight ends Fairchild era at Piedmont
When Flight 293 terminated at Greensboro
on Oct. 25 Piedmont’s Fairchild era came to an
end. There was no fanfare to mark the con
clusion of a 22 year chapter in Piedmont’s
history.
N709U was the last of the 227s to fly in
scheduled service.
Captain H. C. Richardson, First Officer A.
A. Dixon and Flight Attendant Elaine Faulkner
were the crew members on that final flight.
Piedmont ordered its first Fairchilds, eight
F-27s, in 1956. Ten years later they were traded
in on the purchase of the FH-227s. The first 227
went into service in March, 1967. When the last
^tebmortT
N709U
N709U was the
last FH-227 used
in scheduled
service. The
final flight
was on
October 25.
one was retired last month more than 5.6 mil
lion passengers had flown more than 62.5
million miles on Piedmont’s Fairchilds.
The Company started retiring the Fair
childs, to streamline the fleet, in 1974. Last year
two were sold to an Iranian carrier. Others
were gradually removed from the schedule
starting in August of 1974. By June of this
year we were down to one. The seven planes are
currently parked in Winston, waiting to be sold.
While the Fairchilds no longer fit Piedmont’s
equipment needs, the planes are still very much
in use all over the world. The F-27/FH-227s are
operated by aboiit 140- airlines in more than 56
countries. A dozen F-27 versions are being
offered today according to VFW-Fokker, the
manufacturer. They say that, at present, two
aircraft a month are being produced to meet
the demand for the planes.
In light of considerable interest in this type
of equipment, the outlook for the sale of Pied
mont’s seven FH-227s appears good. The Com
pany’s asking price for the planes is between
$500,000 and $600,000 each.
If you know anyone who needs a good air
plane or seven . . .