t me fieamoniwu Nick's Retirement See Page Three VOL. XXI, NO. 7 NOW AN ALL JET-POWERED AIRLINE/ JULY, 1970 Record-Breaking Traffic Figures Reached In June For the first time in the Com pany’s history Piedmont carried over a quarter of a million passen gers in any one month. June, 1970 was the record-break er as 252,111 revenue passengers flew the Pacemaker routes. The actual record was barely a month ^old. In May 244,811 passengers had Supplanted the previous all time high set in June of last year. The increase over June, 1969 was 12%. A further record was noted in revenue passenger miles flown. The total was 70,404,382 as com pared to June of last year which was 60,313,291 or a 17% increase. The load factor for June, 1970 was 49.73%. Other mechanical statistics can be found on page two in the How Goes It? column. Married Employees Might Need Change In Tax Exemptions The following information is for married employees if both husband and wife are working. The Tax Reform Act of 1969 es tablished a new low income allow ance which is available to a'mar ried couple only when a joint re turn is filed. The witholding sys tem gives each employee the low income allowance because it would have created serious complications for employers if different treat ment had been provided for em ployees whose spouses work and for those who do not. The result is that if both husband and wife work, not enough tax is withheld, and at the end of the year the couple may face a large tax bill to make up the difference between the withholding and the actual in come tax. Reduce Exemptions For Piedmont employees in this situation the Internal Revenue Ser vice has recommended that you reduce your withholding exemp tions by two so that you will not owe an additional balance when you file your 1970 tax return. That return is due April 15, 1971. Should your exemptions already be zero, you may wish to estimate more closely what your actual tax charges will be and start saving approximately $20 (a specific dollar amount) each month now so that you will have it readily available when the time comes. Having the Credit Union deduct an increased amount from your pay- eck might be an easy approach, you have substantial income other than wages, quarterly pay ments to the Internal Revenue Ser vice are required. Notify Payroll If you wish to make any changes in your exemption claims you will have to contact the Payroll Depart ment, INT-A. They will be happy to discuss your situation and ad vise you about your best solution. Furthermore, if there are changes to be made, the payroll depart ments of the employers of both husband and wife need to be con tacted. The Internal Revenue Service does not anticipate any changes in the withholding formulas prior to 1972. V m 4'.. , Red Baron Picks Piedmont Arriving in Winston-Salem recently for a special promotion was the Red Baron himself. Shown here deplaning Piedmont's Flight 71 is Snoopy of Peanuts tame. Accompanying the comic character to meet a crowd of hundreds of children who welcomed him to the Twin City were Atlanta based stewardesses Patsy Snell and Lynn Minish. Company Requests Board To Delete Some Service Piedmont has filed applications with the Civil Aeronautics Board requesting permission to suspend service at three points on the Company’s system. There are a number of reasons that the requests were filed. The overall stringent economic situa tion of the entire airline industry was perhaps the primary reason for initiating these actions at this time. Conditions at all points where suspension was requested are rela tively similar in that all are lo cated with convenient access to superior services at nearby air ports. The close proximity of alter nate airports has served to siphon off much traffic from the points involved. Thus, there has been little growth at these points to offset the rapid increases in ex penses generated by these services. The result has been to cause a financial burden to the Company over and above the subsidy sup port paid by the government, necessitating this course of action. First Request The initial request involved de letion of service to Southern Pines, North Carolina. This ser vice by Piedmont is normally sea sonal, from October through April. Traffic generated at this point is relatively small. During 1969 the two daily round trips enplaned an average of only 2.5 passengers per departure. The Southern Pines area is primarily a resort with very little industry. Thus, most visitors have a strong incentive to drive a short distance further in order to utilize the more frequent service, 23 flights a day, at Fay etteville, North Carolina. The Raleigh/Durham and Charlotte air ports are also convenient to South ern Pines. PSK Included The Company has also requested the Board to allow suspension of service to the New River Valley airport at Dublin, Virginia. This airport serves Blacksburg, Rad ford and Pulaski. Service to this point was authorized in 1962 at which time surface transportation to nearby Roanoke, 43 miles, was unsatisfactory. Since then a four- lane divided highway has been built, providing ready access to the Roanoke airport for New River Valley area travellers. Much of the comparatively small traffic potential of the New River Valley area has been diverted to Roanoke where far superior ser vice is available, a total of 50 flights a day. In 1965 there were 13.2 passen gers a day enplaned at the New River Valley facility. Last year there were only 6.6 boardings per day. Thus traffic growth was a negative, averaging —14.2%. ECG Also Asked Piedmont has further petitioned the Board to end service to Eliza beth City, North Carolina. During 1969 there were only 1.7 passengers enplaned per departure, for the two daily round trips. A great deal of Elizabeth City’s traffic potential has been diverted to the Norfolk Airport which is Profit Shown Second Quarter Report Is Out The financial report for the second quarter of Piedmont’s operation was released the latter part of July. The Company earned a consoli dated net profit of $285,668 or 13.5 cents per share during the period. This compares with a profit of $199,090 or 9.4 cents per share for the second quarter of 1969. The 1970 second quarter profit was in sufficient, however, to offset the loss incurred during the first quarter of 1970. Accordingly, the loss for the first six months was $761,473 as compared to the first half loss of $545,371 in 1969. The following remarks are ex cerpts from President Davis’ letter to the stockholders as included in the report: “Revenues from all sources con tinued to grow at a very encourag ing rate. Total consolidated gross revenues were $40,567,217 in 1970 as compared to $34,860,820 in 1969 — an increase of 16%. Expenses have continued to increase, how ever, at a rate which makes a return to profitable operation ex tremely difficult. For example, total revenues of the Airline Di vision went up $6,953,210 during the first half of 1970 as compared to the same period in 1969 but ex penses increased $7,161,070. Cash operating expenses of $4,527,900 accounted for most of this increase and the greater part of that was tor higher wages. Most of the balance of the increase of $2,633,- 170 was for depreciation and in terest expense. Debt Payments “Our debt service commitments have been met on schedule. In addition, we are not in default on any of the covenants of our loan agreements. During the past two years, we have made principal payments against our long-term debt of almost $8,000,000. Of this amount, $2,440,697 was paid dur ing the first six months of 1970 in addition to interest payments of $3,392,700. “Principal debt service require ments for the remainder of 1970 are $4,026,358, Cash flow from de preciation and amortization alone will exceed this amount and, ac cordingly, we foresee no difficulty Limit For Bags Set By Carriers At Seventy Lbs. Effective the latter part of June, Piedmont and all other air car riers will not accept any bag as pas.senger luggage which weighs more than 70 pounds. Any bag weighing more than 70 pounds or with dimensions that exceed 80 inches must be carried as air freight. An earlier provision, in effect for some time, provides that any bag more than 80 inches in length, plus height plus width is not ac ceptable as baggage. Piedmont has advised all count er personnel of the 70 pound limit for any piece of luggage. slightly more than an hour’s drive away. Other than Piedmont there are t.wo trunk carriers and an other local service airline serving Norfolk with 83 flights a day. These petitions were filed by the Company the latter part of July. Interested parties have 20 days to file answers to the appli cations. in continuing to meet all obliga tions to our lenders and the holders of our subordinated debentures. Some Sales Decline “As a direct result of the current tight money market, aircraft sales have declined. As a consequence, pre-tax earnings of our separately operated divisions during the first half were $134,037 as compared to $284,144 last year. “As previously indicated, our airline traffic has increased at a fairly encouraging rate even at a time when the trunk airline in dustry is experiencing no growth. Revenue passenger miles of 371,- 476,984 during the first half repre sented an increase of 21% over last year. The passenger load factor was down, however, from 48.00% to 44.86% because of the substantial increase in available capacity resulting from the full utilization of all of our new, faster and larger B-737 and YS-11 jet- powered aircraft. Support Needed “Our best efforts are constantly devoted toward improved services and improved earnings. Toward that end we earnestly solicit the continued support and cooperation of our employees, stockholders and friends. An average of just one more passenger on each flight wotild increase revenues by more than $2 million per year. This amount of additional business, and more, is attainable and the result ing improvement in earnings would make it possible for us to provide a better service to the public, offer better job opportunities to our em ployees, and enhance the value of the stock owned by our stock holders.” The traffic statistics for the sec ond quarter of 1970 showed 6.150,- 515 revenue miles flown as com pared to 5,586,098 for the same period last year. The completion factor also improved from 98 96% in 1969’s second quarter to 99.24% this year. For the quarter, revenue passen ger miles were up to 203,247,000 from 171,721,000. A further increase was also noted in express and freight ton miles. For the three months ended June 30, 1969 the figure was 1,072,670 while the 1970 period listed 1,649,597. PI Employee Stock Purchase Progress To help you keep up with the amount you pay for Piedmont stock every month if you’re buy ing it through payroll deduction the Piedmonitor publishes this periodic report of the number of shares purchased, average price per share and total investment in the previous month. FOR JUNE Amount Invested . $5,168.36 Number of Full Shares Purchased 847 Average Price Paid Per Share $ 6.10
