around
the industry
The FAA forecasts the number of days with 100,000
flight operations or more could reach 200 this year, up
from 150 in 1986.
* * «
FAA Administrator Donald Engen will resign from his
post, which he has held for the past three years, in July.
« * *
P'ollowinga trend to award bonus points for non-airline
services and products. United is offering two frequent
flyer miles for every dollar spent at a Westin hotel, includ
ing charges for telephones, restaurants, laundry, room
service, in-room movies, and parking.
♦ ♦ *
Pan Am reported an operating loss of $340.8 million
and a net loss of $462.8 million for 1986 compared with
an operating loss of $197.6 million and net profit of $51.8
million in 1985. The 1985 net profit figure included a
$341 million gain on the sale of the airline's Pacific Divi
sion to United. The airline's 1986 yield was 10.20 cents
compared with 9.86 cents in 1985.
Except for Pan Am, all major carriers had a better oper
ating profit performance in the fourth quarter of 1986
than during the same 1985 period. For the full year, only
four airlines—Piedmont, USAir, Northwest, and United
—generated greater operating profits. Piedmont, along
with Delta, Northwest, and United, was the only major
carrier to report better operating profit margins in 1986
than 1985. USAir had the highest operating profit mar
gin, 9.23 percent, followed by Piedmont's 8.81 percent.
* ♦ *
Over the next five years, the Port Authority of New York/
New Jersey will spend $2.4 billion to improve area air
ports. At JFK, a new people-mover system, which will
link the terminals with a central transportation center,
will be built; the international arrivals building will be ex
panded; the terminal roadway system, reconfigured; and
a new air traffic control tower, built. At EWR, a people-
mover system, new roadways, and more parking facilities
are planned. At LGA, projects include a new passenger
terminal and highway access improvements.
* * *
In a recent report on airline consolidation, Texas Air—
including Continental, New York Air, People Express,
and Eastern —led the industry in "unadjusted debt and
capitalized leases" which, as of September 30, 1986,
amounted to more than $3.9 billion. The next largest
debt was $2.13 billion for American and Air Cal, which
American is acquiring; $1.99 billion for United; $1.97 bil
lion for TWA-Ozark; $1.26 billion for Delta-Western;
$950 million for Northwest-Republic; and $834 million
for Pan Am. The debt of USAir/PSA/Piedmont would
amount to $1.05 billion.
* ♦ *
Air Canada, which first introduced non-smoking
flights last year in the Toronto-Ottawa-Montreal market,
is introducing non-smoking flights on all service be
tween New York and Toronto and New York and Montreal
fora three-month trial period, effective April 26. The car
rier has eight daily flights in these two markets. A survey
conducted by Air Canada revealed that 83 percent of its
passengers traveling on these routes were non-smokers
and that customer preference for non-smoking flights
was even stronger.
« * *
ATL is beginning to overtake ORD as the world's busi
est airport. At the same time, AT L has bypassed EWR to
become the airport with the highest delay average.
♦ ♦ *
Following is a chart showing how Piedmont and USAir
ranked among the major carriers in 1986;
yield
net profit
operating profit
operating revenues
operating expenses
Piedmont
1st (15.824)
5th ($72,4 million)
5th ($164,4 million)
9th ($1.87 billion)
9th ($1.70 billion)
USAir
2nd (14.93«)
3rd ($98.4 million)
3rd ($169.4 million)
10th ($1.84 billion)
10th ($1.67 billion)
2
Combined. Piedmont/USAir would have ranked sec
ond in 1986 behind American in operating profits, ac
counting for 22,5 percent of these profits. In net profits,
the Piedmont/USAir combination would have ranked
third with 22 percent of the earnings, behind American
and Delta/Western. In terms of operating revenue. United
ranked first; Continental/Eastern, second; American,
third; Delta/Western, fourth; Northwest/Republic, fifth;
and Piedmont/USAir, sixth.
Howard displays re
cent awards from
Financial World
which honored him
as the top CEO in
the transportation
industry for 1986.
Howard named top CEO
Bill Howard, Piedmont's chairman, presi
dent, and chief executive officer, has been
chosen as the most outstanding chief execu
tive officer of 1986 in the transportation
industry by Financial World Magazine.
Howard was one of 12 winners chosen
in broad industry categories from a field
of 2,400 candidates. The April 21 issue of
Financial World notes the following in a spe
cial feature on Howard:
" ’Bill has not done badly,' says a Piedmont
insider. 'When he arrived here in 1978, the
stock was standing at just seven bucks.' That
makes Piedmont a standout in an industry
where deregulation has grounded many
airlines and forced others to struggle for
survival.
" ‘If you look at the numbers you cannot
argue that Piedmont is the best,' notes Ed
ward Starkman, airline analyst at Paine-
Webber, In the past five years, revenues have
soared from $715 million to $1,865 billion,
and operating income from $25.6 million to
$164 million last year. The flight path for
earnings per share, rising gradually from
$2.53 to $3.45 fully diluted, has been less
stunning. But Howard has raised cash the
old-fashioned way, via regular equity issues,
rather than by piling up debt in such a
highly leveraged industry. Last year's debt,
as a percentage of shareholders' equity, was
cut from well over 100 percent to just 46
percent."
Howard was honored at the CEO of the
Year Awards Banquet held in New York on
March 18. Other recently honored CEOs of
the year have included Sam Walton of Wal-
mart Stores, Roger Smith of General Motors,
John Opel of IBM, and Lee laeocca of Chrys
ler Corporation,
on April 15
number of departures; 1,270
miles flown daily: 442,331
ASMs; 51,138,090
number of aircraft in fleet: 165
average aircraft hop; 348.3
number of airports served: 87
daily block time flown: 1,474 hours,
52 minutes
next schedule change: May 15
rattic
March
2,228.710 -t-20.8%
987.7 million + 15.6%
1.6 billion + 11.5%
63.40% up 2.28 pts.
First Three Months
5,742,463
2.6 billion
4.5 billion
57.33%
-t-20.6%
+ 16.3%
-1-11.4%
up 2.44 pts.
passengers
revenue passenger miles
available seat miles
load factor
March was an all-time record month in passengers. RPMs. and ASMs. and the load factor was a record for
the month of March. In addition, all-time records were set for the first three months in all four categories.
The following 26 stations set new boarding records in March: CAE. CLT. DAY. CAB. FLL. GRR. GSP. ISP,
JAX AZO. EYW. TYS. MIA. YUL. APF. MSY. MCO, YOW. PNS. PHL. SAV. SYR. TLH. TPA. DCA. and PBI.
cargo
(ton miles)
U.S. Mail
Air Freight
Air Express
TOTAL
2,005,065
2,690,409
67,958
4.763,432
March
-H 5.8%
-1-50.2%
-H 17.9%
-1-27.2%
First Three Months
5,764,631
7,332,453
171,266
13,268,350
-I- 8.0%
-1-44.6%
-(• 11.2%
-t-26.7%
Piedmonitor • April 1987