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Aviation History
1963
1963 - 0005.PDF
FLIGHT International, 3 January 1963 5 AIR CO E R C E PAN AM WORLD AIRLINES, INC AFTER at least nine months of discussions the directors of PanAm and TWA have now agreed on the terms of a merger. i Although everyone in the American air transport industry, including i the CAB, seems agreed that PanAm and TWA must do some sort [of deal to counter the growing commercial threat from foreign * airlines, full implementation of the merger could still be as much as I two years away and it might be very different from the proposals I now being put to the shareholders, the CAB, and—in due course— I to the President. Under the present proposal. Pan American World Airways line will become a holding company with 11,34m shares (exchanged Jon a 1:1.7 ratio for 6.67m of its own shares) in a new operating | company to be known as Pan Am World Airlines, Inc. The new Icompany will have a total of 18m shares, the remaining 6.66m of l these being exchanged on an equal basis for TWA's outstanding [stock. In addition, the holding company will receive 150,000 | shares of $100 par value convertible stock in the operating com pany and retain its other assets including S6.5m cash, 463,988 I shares in National Airlines and certain interests in the PanAm ^building over Grand Central Station, New York. The new operating company will take over the fleets and routes rof PanAm and TWA, and after Aeroflot it will become the world's ^largest airline measured by any standard. Pan Am World Air- nines would be even larger than the proposed American-Eastern : combine. The combined fleet would number nearly 300 aircraft, i including more than 130 big jets, and cover a route structure of ; about 80,000 miles after elimination of present duplications. Apart from the CAB and President Kennedy, approval for the ; merger must be given by the shareholders, and one big unknown [factor here is the position of Howard Hughes, who through his jjwholly owned company Hughes Tool owns 78 per cent of TWA. Mr Hughes' position is further complicated by the litigation in sprogress between Hughes Tool and TWA's financiers. The finan ciers are claiming S115m from Hughes Tool for interfering in the amanagement of TWA and Hughes Tool is counter-claiming for |?366m on a reciprocal charge. However, whatever the outcome, gTWA stands to gain out of the action because both sides want the ^damages to be paid to TWA. The actual PAA and TWA merger -terms provide for suitable adjustments if the net worth of TWA 5s raised by more than S 10m as a result of litigation. : CAB reaction to the proposed merger cannot be forecast, but •-as guardians of the anti-trust laws they will doubtless be more Jet aircraftt Prop, aircraft Employees Route mileage Pass-miles (million) Passengers (million) Revenues (million) PAA 59 69 23,000 70,000 total 5.360 3.39 £164 THE WEIGH- Comparative TWA 75 89 21,000 50,000 int. 905 0.28 £30 dom estic 4,250 4.65 £100 IN sizes in 196 PanAm World Airlines' 134 158 44,000 120,000 int. 6,265 3.67 £194 dom estic 4,250 4.65 £100 United 68 197 32,000 N.A. total 7,330 10.2 £195 BOAC 81 39 21.000 N.A. total 2,625 0.84 £92.7 Air Union* no 164 56.000 N.A. . int. 4,749 4.54 N.A. _ International only in the case of Air Union, and before elimination of duplica- I tions in both cases, t In service and on order. J 80,000 miles after eliminating > duplication. than a little worried that even an American airline might grow so large that it would handle 22 per cent of the entire international airline passenger-miles outside the Soviet bloc. US domestic trunk carriers are certain to object strongly to the merger because of the effect it will have on their competitive position. By inheriting TWA's extensive domestic network, Pan Am World Airlines would be in a strong position to take nearly all the feederline traffic for interna tional flights. Last March, a CAB staff study recommended a solution to the US international airline problem by dividing the routes of PanAm and TWA in such a way as to avoid competition between the two carriers, but leaving them under separate manage ment. PanAm disliked the plan and TWA showed mild enthu siasm. However, unlike the American-Eastern merger, which seems likely to founder under a CAB examiner's disapproval, the Pan- Am-TWA deal has one very big point in its favour from the official point view. It has been calculated that the US adverse balance of payments resulting from foreign airline transport paid for in dollars is currently about £90m a year. This merger, through providing a more efficient, wider, and better service, would bring a significant reduction in the drain on US stocks of gold. SOVIET BID FOR ROUTE TO CUBA IN a Foreign Office note sent to the Russian Embassy in London on December 28, the British Government refused permission for an Aeroflot 11-18 to refuel at Prestwick Airport en route for Cuba. The note is reported to have said that facilities in Britain would be given if British aircraft were allowed beyond Moscow on the great circle route to the Far East—though according to BOAC, these rights have not been sought for some years. A Foreign Office spokesman said there have been so many Russian requests for refuelling facilities at Prestwick that it has almost become scheduled. Two days later Pravda reported that a Tu-114 had flown nonstop from Havana to Moscow in just under 4hr. According to reports, just before Christmas this aircraft flew almost to the limits of its range on the nonstop outward journey to Cuba, overflying Murmansk and Iceland on the way. Mr Y. Bashchinov, deputy director of Aeroflot. says the way is now open for a weekly service betwen Moscow and Havana. CARVAIR CRASH AT ROTTERDAM WHILST performing the regular car-ferry service between Southend and Rotterdam, a Carvair of British United Air Ferries hit a dyke while coming in to land at the snow-covered airport at Rotterdam on December 28. The starboard wing was torn off and the aircraft came to rest upside down. The 14 passengers and three of the crew received only minor injuries but the pilot, Capt J. Tootill, was killed. Although the aircraft was extensively damaged, a number of cars in the fuselage were still securely tied down after the impact. Since services began in 1948, a Flight International inquiry reveals, nearly 2|m passengers and fm cars have been carried across the Channel on some 388,000 flights without a single passenger fatality. Northwest DC-7C Ditching Cause The DC-7C of Northwest that ditched off Alaska in October may have been in exactly the same trouble as a Northwest DC-7C that ditched off Manila in July 1960, according to a CAB report. There was probably a failure of the two-speed blower drive which, incorrectly diagnosed as icing, led to engine failure, propeller runaway and separation, and mag nesium gear-casing fire.
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