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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.
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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