page two
Financial and traffic reports
President T. H. Davis said, “Revenues from the
record traffic growth of our Airline Division
were not great enough to offset the lower fares
which helped to produce the growth. Revenue
losses from promotional fares and increased
expenses incurred in opening new markets last
year caused a decline in earnings of our Airline
Division. The sales and profits from our General
Aviation operations showed substantial growth
and improvement in 1978.”
1978 was the first year the Company paid
(Continued from page one)
regular quarterly dividends to its shareholders.
For the 12 months, dividend payments totaled
$633,264, or 24 cents per share.
In January, 1979, the Company’s directors
declared a cash dividend of six cents per share
on the common stock of Piedmont Aviation, Inc.
Payable March 5, 1979 to stockholders of
record on February 16, 1979, it is the 20th cash
dividend to be paid by Piedmont.
The Airline Division’s traffic results for
January, 1979 show a continuation of last year’s
record-setting trend. Available seat miles, rev
enue passenger miles and passenger boardings
were at new highs for the month of January.
ASMs were up 25.3 per cent, to 247,979,975
from 197,883,338 in the first month of 1978.
RPMs jumped 30 per cent in January, 1979, to
115,038,543 from 88,448,392 last year. Pas
senger boardings for the first month of the
year were up over 25 per cent to 363,043 from
290,173 in January, 1978.
New benefit plans
(Continued from page one)
so that enrolling in the plan actually doubles
your coverage.
When you elect this supplemental coverage,
you automatically become eligible for additional
spouse and dependent coverage at only 11^
per month.
For married couples who are both employees,
either or both may enroll; if both do so, they
will have spouse coverage on each other (in
addition to the supplemental amount) and
double coverage for any eligible children.
Employees who have either a spouse or
dependent children at the time of enrollment
must sign up for them at that time or will
thereafter be required to produce medical
evidence of insurability before they can be
covered. Employees who have neither spouse nor
dependents at the time of enrollment and who
later acquire either, must enroll them within
30 days of the time the relationship is estab
lished.
The supplemental coverage will be automa
tically adjusted when an employee’s basic cover
age changes. This supplemental coverage will
terminate at any such time as the basic amount
furnished by the Company terminates as pro
vided in that plan. Refer to “Your Life In
surance Plan” booklet for further details on
this nrovision.
The proposed supplemental retirement plan
is open to all permanent, full-time employees
with one or more years of service. Enrollment
cards will be sent to employees within the next
several days.
This plan offers employees an investment
opportunity for additional retirement income.
It also may provide educational assistance,
financing for housing, or money for catastrophic
situations.
The plan is subject to Internal Revenue
Service approval and has been designed to meet
their requirements. With IRS approval, the in
terest earned will receive deferred tax treat
ment. A minimum of $250,000 of annualized
contributions is necessary for the Company to
implement the program. While that sounds
like a large sum, it is only approximately .3
of 1 per cent of Piedmont’s total 1978 payroll.
Employees may contribute whole percent
ages from 1 per cent through a maximum of
10 per cent. Contributions will be applied to
gross earnings each payday.
If the plan is implemented in 1979, an annual
interest rate of 9.5 per cent from date of deposit
with AEtna for contributions made in 1979
would be guaranteed. Additionally participants
would receive a minimum guarantee of 8.7
per cent for the years 1980, 1981, 1982 and
1983. In the fall of each year, AEtna will an
nounce the actual guarantee for the next year,
which must be at least 8.7 per cent and prob
ably will be higher. In the fall of 1983, AEtna
will provide a new set of minimum guarantees
through the year 1988. The cycle is then re
peated each five years.
All interest rates are compounded at a daily
rate which will produce the annual guaranteed
rate to commence with the date the money is
deposited with AEtna.
To be consistent with the basic intent of
the plan, namely a retirement supplement,
withdrawal opportunities have been limited
in the plan design. Additionally, if the fund was
subject to too much fluctuation, AEtna would be
unable to make the kind of investments that
make these attractive interest rates possible.
Some penalties associated with withdrawals
are required by the IRS in order for the plan
to qualify.
The withdrawal provisions include:
For terminations with less than 10 years
participation other than retirement, retire
ment disability or death, lump-sum pay
ments would be made. For terminations
with 10 years and more of participation
and for retirement, retirement disability
or death, lump sum or the same payment
options provided for in the Company’s pen
sion plans would be offered.
For educational assistance — the plan
could be used for funding educational
needs.
For home purchases — the plan could
provide an excellent vehicle to save for a
down payment on a house.
For catastrophic situations — this pro
vision would be administered by the
Employee Benefits Committee. Operating
from standard and consistent guidelines,
the Committee would approve withdrawals
at such time as an employee might en
counter unexpected, major problems. These
problems would include situations such as,
the loss of home through a flood or fire, a
major financial setback, and so forth.
Normal withdrawals should take about 30
days.
Reductions or increases in the percentage
of contributions can be made only once every
six months.
Contributions can be discontinued at any
time, however, a participant must wait six
months before starting contributions again.
Lump-sum contributions cannot be accepted.
Contributions will be by payroll deduction only.
Accounts cannot be used as collateral for loans.
An annual statement of each account will be
furnished.
The enrollment period for the supplemental
retirement plan will commence when cards are
sent out and will terminate at 5:00 p.m. on
Friday, March 30, 1979. If enough employees
enroll and the plan is implemented, the first
contributions will be deducted commencing
with the first payroll after April 1, 1979.
While both of these plans are financed en
tirely by employee contributions. Piedmont will
pay all administrative costs. These two plans
will significantly supplement employees’ exten
sive Company-paid benefits.
Industry notes
Industry's traffic up 177 per cent for year
Domestic and international scheduled airline
traffic, which increased 8 per cent in 1977 over
1976, was up 17.7 per cent in 1978, according
to the Air Transport Association.
The ATA has also reported that the nation’s
airlines used about 50 million gallons less fuel
in 1978 than in 1973, while carrying 78 million
more passengers and more cargo. The report.
Airlines and Fuel Conservation, shows an in
crease of 38 per cent in passengers fiown and
passenger miles produced per gallon of fuel
since 1973. In 1978, the U. S. scheduled airlines
accounted for nearly 85 per cent of public trans
portation passenger miles between U. S. cities
and for about 95 per cent of such travel between
this country and points overseas.
Brazil requires visas
Now, U. S. citizens who want to visit Brazil
must obtain a visa from a Brazilian consular
office before leaving home. The Brazilian Gov
ernment adopted this new regulation in Decem
ber. No charges are imposed for visas issued to
U. S. tourists, but travelers must present a
valid passport and one passport-size (2 by 3
inches) photograph when applying for a visa
to visit Brazil.
Paste-up needed for interchange
Regularly scheduled Concorde service be
tween Dallas/Ft. Worth and London and Paris
started in mid-January with both British Air
ways and Air France airplanes. The carriers
have interchange agreements with Braniff.
To meet Federal Aviation Administration
regulations which forbid U. S. airlines to operate
foreign airline-owned equipment requires a
massive and on-going paste-up program.
Federal laws require U. S. airplanes to have
registration numbers that begin with an N.
British laws say British Airways planes must
have registration numbers that begin with G.
French laws contribute further confusion.
The registration problem was solved when
British Airways and Air France organized a
subsidiary U. S. corporation to own the Con
cordes when Braniff flies them. The solution
means that the airplanes’ ownership must
change every time a British or French crew gets
off and an American crew gets on the plane.
Thus, a representative of Britain or France or
the U. S. has to be present at Dulles every time
the Concorde comes through to certify that the
foreign registration has been canceled. So, for
every flight, someone climbs up to the Con
corde’s tail to either paste on or remove a big N.
A special adhesive to permit the N to be quickly
applied and removed without damaging the
Concorde’s white paint was developed by the
3M Company. Since the passengers never have
to leave the plane, they miss all the paste-up
action.
Other news about Concorde includes word
that the last of the eight supersonic jetliners
built in France has made its first test flight.
The final one of the eight Concordes built in the
United Kingdom is scheduled for completion
in February, 1979. After these 16 planes, no
others will be built, according to Aerospatiale
officials.
Hot air?
The Wall Street Journal reported a Japanese
government agency has requested $280,000 to
finance development of a dirigible-type airship.
Plans call for a 120-passenger or 20-metric-ton
cargo ship to be developed over the next six
years. Total cost of the lighter-than-air craft
is expected to be about $78 million.
f^ietjfTwamragp
Piedmont Aviation, Inc.
Betsy Allen, Editor
Smith Reynolds Airport
Winston-Salem, North Carolina
PIRUne EDITOR/