Piedmont Aviation Employee Newsletter /
Feb. 1, 1983, edition 1 /
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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
Affairs Don McGuire
announce Pi's plans.
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."
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,"
"BWl's airport administration and
the State of Maryland also have an
aggressive record when it comes to
support given to their airlines and
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
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
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.
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
"We've seen tremendous growth at
continued on page 3
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.
“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
"There are probably more things
we can control in terms of profit
ability than we might think,"
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
continued on page 5
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