Newspapers / Piedmont Aviation Employee Newsletter / Feb. 1, 1983, edition 1 / Page 1
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February 1983 volume 34, number 1 News about Piedmont. The Up-And-Comint^ Airline. More than 150 ob servers and media members turned out for the announce ment of Piedmont's new BWT "hub" held in the central lobby of the terminal. Seated at the podium (left) is Maryland DOT Secre tary Lowell Bridwell. Piedmont BWI em ployees turned out in force /right center) to hearStqffV.P. Public Affairs Don McGuire announce Pi's plans. \i A I Up pops BWI for next hub Piedmont will establish a third major hub operation at Baltimore/ Washington International Airport with new services beginning this summer The einnouncement was made at a joint press conference with Maryland's Department of Transportation and BWI officials on Januaty 26. "BWI is a logical gateway for us," explains Dick James, staff vice presi dent - corporate planning. "It's strategically located at the northern perimeter of our heartland. No other jet carrier has a significant connecting hub operation in the Washington area, and we feel that our experience with our hubs at Charlotte and Dayton gives us a spe cial expertise for the BWI expansion." factors During the last year. Piedmont has considered many other locations for the airline's third hub. Several fac tors influenced the decision to go with BWI, an airport Piedmont has served since 1962. • BWI serves a market seven times the size of Charlotte’s population yet has less than 100 domestic jet flights a day by major carriers compared with over 165 at Char lotte. Thus, there is an obvious need for additional service. • Over four million people are within an hour's drive of BWI. • In the last five years the Baltimore SMSA (Standard Metropolitan Statistical Area) has grown more than the Washington SMSA • During the first half of 1982, BWI enplaned more international traf fic than any other area airport. “Like most other cities courting Piedmont for service these days, BWI has recognized that cities too must compete for air carrier's service," says James. support "BWl's airport administration and the State of Maryland also have an aggressive record when it comes to support given to their airlines and their service." For the past two years, the U.S. government has been negotiating for a BWI-Toronto route for which Piedmont has applied, and the air port administration has given their support to the proposed service. "BWI-Toronto would fit like a glove into our hub operation," says James, "but Canada has cut off discussions for now because it doesn't want any more competition from U.S. carriers in the present economic climate. “The last negotiations on a route with Canada took over five years, so with this history we can conclude these negotiations were extremely difficult, and therefore it will proba bly be a couple more years before the current negotiations are completed," he says. “Even then, there Is no guar antee that the BWI-Toronto route will be part of the final U.S./Canadi an package." Unlike domestic routes, interna tional routes are still regulated, thus, even if the route is negotiated as part of the new U.S./Canadian bilateral. Piedmont would still have to com pete for the route with other inter ested carriers in CAB. economic proceedings. Piedmont presently employs 36 people at BWI, but by this summer there will be over 100. Station man ager at the facility is Wally Kerr, a 30-year veteran with Piedmont who has been at BWI since 1978. facilities BWI will build 12 new gates for Piedmont, and we will move into new customer service and operational facilities as they are completed. Connecting cities as well as the number of departures from BWI will be announced 30 to 60 days before service begins. Much will depend on the availability of slots. "We're optimistic we'll get the slots we need," says Bob McAlphin, staff vice president-scheduling. "We've seen tremendous growth at continued on page 3 Earnings fall Despite '82's Revenue gains Piedmont's 1982 earnirngs were gratilylng compared to industry trends. At the same time, a close re view of the figures indicates that 1983 represents a great challenge. "Certainly the $30.5 million net earnings probably look enviable to other airlines," President Bill How ard said. "But even if we put every other consideration aside, it is so bering to consider that our earnings declined despite the fact that we added 1,000 personnel, expanded our fleet, and our sales rose nearly $100 million over 1981." Indeed, Piedmont grew in virtual ly every respect except earnings. In addition to the absolute fig ures, Howard said we have to be concpra^ n .'ifeoat'a ’■ea’ - decline in operating profit. operating profit “There are few items more impor tant to me on our financial state ment than our operating profit," Howard said. "We exist to make a profit on flying passengers from one place to another. And the cold truth is that our passengers paid us $93 million more in 1982 than they did in 1981, but our profit from flying these passengers actually declined by $33.3 million." The actual decline was 58 per cent, year over year. "We were fortunate that the sale of tax credits, the sale of aircraft, and direct income tax credits offset most of the decline in operating profit. But our future really de pends upon returning to a sound profit on the handling of our pas sengers," Howard said. Piedmont actually lost $3.9 mil lion on transport operations during the fourth quarter, which, coupled with the first quarter loss of $4.4 million, meant half the year's opera tions were in the red. In 1981, Piedmont reported a profit in all four quarters. lower yields "There are probably more things we can control in terms of profit ability than we might think," Howard said. He pointed out that a major fac tor in 1982's reduced earnings was the lower yields the airline expe rienced in its passenger fares. (Yield is the average cents per mile our passengers pay for flying on Piedmont.) continued on page 5
Piedmont Aviation Employee Newsletter
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Feb. 1, 1983, edition 1
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