Whal kind of year was it for the airline industry in
’85? Figures are mounting to show it was a record year
in many respects.
According to the Air TYansport Association, figures
should show that U.S. airlines carried more than 375
million passengers last year. Although the figure broke
the 1984 record of 343 million, operating and net
income are expected to be slightly lower due to the
expanding use of discount fares. More than 80% of
domestic travel during the first nine months of 1985
was bought at a discount and discounts averaged more
than 50%.
IVenty-seven percent more of the adult population
flew this year than last and 70% of their tickets were
sold by travel agents. lYavel agent sales for the year
were $32.3 billion compared to 1984's $29.8 billion.
Credit card sales are at a record high of 52% of all sales.
The number of travel agent locations increased 6% over
last year.
* * *
More than 300 new advance technology aircraft
valued at over $10 billion were purchased in 1985 by
ATA member airlines. Obviously, more pilots are needed
to fly them. According to the Future Aviation
Professionals of America, a record 7,872 pilots were
hired in '85, more than one-third greater than the
number hired in '84 and triple the number hired in '83.
The total did not include the 1.256 pilots recalled from
I'urlough nor the 3,046 hired by commuter/regional
airlines. (PI hired 328 new pilots in '85.)
* * «
According to industry executives, the most important
airline marketing events in 1985 were; the introduction
by AA of 30-day advance purchase ultimate super saver
fares in Jan. (which other airlines quickly adopted) and
widespread dual designator marketing agreements
(almost 50 were signed this year). The experts also
noted other important events in '85: the largest aircraft
orders ever by NW and UA, AA announcement of a hub
at RDU UA’s hub plans at Dulles. UA’s month-long pilot
strike and its purchase of Pan Am's Pacific Division for
$750 million, and Pi's purchase of Empire and the
establishment of The Piedmont Shuttle in Florida.
* ♦ ♦
And what about 1986? During the same week that
Piedmont's acquisition of Empire was approved,
another merger was filed for approval with the DOl'—
this time for Northwest Airlines to acquire Republic in
an $884 million deal. If approved the combined
operation would make Northwest the third largest car
rier in the nation with 30,000 employees and 298 air
craft serving over 100 cities in the U.S.. four in Canada,
two in Mexico, eight in Europe and 11 in Asia.
Another aircraft manufacturer will be busy this year
too—Delta placed a $2 billion order for 80 MD88
McDonnell Douglas aircraft in January.
♦ * ♦
A buy-sell rule approved by the DOT. allowing airlines
to sell slots at the four U.S. high density airports of JFK.
IXjA, DCA. & ORD, goes into effect April 1. Foreign
carriers had been assured of slot availability by DOT.
Additional slots must be applied for by Feb. 1.
* * »
Eastern's major creditors recently told the company to
have all of its labor contracts settled by Feb. 28 or face
default on an estimated $2.5 billion in long-term debt.
Labor is 39% of EA's total cost compared to 19% and
17% for CA and PE, respectively.
As a result EA announced it is laying off 1.010 of its
unionized flight attendants along with reducing their
pay and changing fringe benefits. Also, effective Feb. 1.
the salaries of EA's non-union and management have
been reduced 20%.
2
When British Airways announced that
it would start deiily nonstop LlOll ser
vice from BWI to Heathrow Airport in
London, a group from Piedmont met with
the airline to discuss details for a joint
marketing program. Among those taking
part in the program are (front row, 1 to r)
Virginia Pryately, JAX sales represen
tative; Dave Howard, INT sales repre
sentative; John Kinney, RDU sales
representative; Gordan Grant, BNA city
sales manager; and Samuel Keene, RIC
city sales manager; (second row, 1 to r)
Chuck Allen, DAY district sales manager;
James Douglas, CLT sales representative;
Dave Myrick, manager-sales planning and
administration, INT; and Joe Grant, ORF
district sales manager.
Pi's greatest challenge—
Improving our yield
Piedmont people from all
areas of management met
January 29-31 in Miami to
discuss what we accom
plished in 1985 and to deter
mine priorities for 1986.
Also on hand for the two
days of presentations were
representatives from Henson,
the Piedmont Regional Air
line; Britt, Jetstream, CCAir,
Trans Air, and Brockway,
members of the Piedmont
Commuter System; and
Empire, which will merge
with Piedmont on May 1.
"Improving yield will be the
most difficult challenge we
face in 1986." Bill Howard,
president and chief executive
officer, told the 450
participants.
“1985 was the year of dis
count fares. In 1986, we'll
carry many passengers and
our load factor should stay in
good shape, but because of
discount fares, our yield will
probably not improve. One
salvation for us and the air
line industry as a whole will
be lower fuel costs which will
help offset the decline in
yield."
Also in 1986, Howard
pointed out, our maintenance
operation will be under close
scrutiny, especially because of
our rapid growth since
deregulation.
"I have great confidence in
the thoroughness of our peo
ple," he said. "Fortunately, we
have not had to skimp dollar-
wise on maintenance, and I
think we're in as good or bet
ter shape than any other
airline."
Howard noted that our im
pending merger with Empire
coupled with our recent
Florida expansion has made
us a very formidable competi
tor in both the Northeast and
Florida.
"In Florida, we've built a
feed position which will with
stand the onslaught of others.
We're not only excelling there
but can fend off competition."
he said.
"Management has also
spent much time on the
Empire decision, and 1 think
we made a good choice. One
reason we at Piedmont have
succeeded is because we've
walked tall and felt good
about ourselves. The same is
true of employees at Empire.
The two will mesh well."
Howard announced that
Paul Quaekenbush stepped
down as Empire's president
and chief executive officer on
February 1 to pursue other
interests, and Howard Phipps,
former financial officer for
Empire, is now acting presi
dent and will serve as the key
coordinator until the merger
is effective May 1.
"1 predict the Empire ma
triculation will be a big suc
cess and these employees will
become an important part of
the Piedmont team," Howard
said.
The importance of the Pied
mont Commuter System was
also stressed during the con
ference. "Our success will
continue to be highly depen
dent on this feed," Howard
said.
In addition, representa
tives from customer ser
vices. passenger services,
marketing, planning,
finance, maintenance,
operations, and general avia
tion gave presentations dur
ing the meetings.
At the close of the con
ference the question was
raised in regard to the
rumor that another airline
might acquire Piedmont.
"There is no truth to these
rumors," Howard said em
phatically. "I think at this
time our company is best
served by continuing to
grow as we have. Basically, 1
want to acquire more air
craft, new routes, and good
people and continue in the
present mode."
As for another hub open
ing in 1986—not likely.
"We'll enhance what we're
already doing first," Howard
said.
THE BEST
GETS BETTER.
V
number of departures: 1,032
miles flown dally: 373,427
ASMs (available seat miles): 46,617,843
number of aircraft in fleet: 131
number of block hours flown daily: 1,174
average aircrsift hop: 361.8 miles