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Aviation History
1964
1964 - 1737.PDF
956 AIR COMMERCE . . . FUGHT International, II June 1964 FLYING DUTCHMEN FEW if any airline reports have presented such a stark picture of sheer struggle for survival as the 1963 report for KLM. Perhaps the most revealing single item is the employment trend: in 1960 KLM employed over 18,600 personnel; by the end of 1963 this figure had fallen to 15,600 No less distressing are some passing phrases in the notes to the accounts: "in the case of bankruptcy of KLM" . . . "and the company's own equity is almost entirely gone." On almost every page there is evidence of a last ditch struggle to survive: traffic down 7 per cent, notably on the valuable North Atlantic routes; load factors down from 55 to 48 per cent; five stations dropped from the network; seven Super Connies and Connies scrapped; widespread resignations and disagreements among top management and among Board members; and persistent heavy losses despite the rigorous economy measures (the reduction in the operating deficit from Fl 75m in 1962 to Fl 55m in 1963 was entirely due to a saving in depreciation). However, scattered among the pages of this woeful catalogue there are signs that the worst is now over. The break-even load factor has been falling steadily, reaching 53 per cent in 1963. Another factor is the reorganization programme which is now reaching completion. By transferring from the functional to the "line and staff" principle, the top management is now more free to concentrate on policy matters and on maintaining proper control. A further fillip has come from the general buoyancy of air traffic, particularly across the North Atlantic and within Europe. Early proof of these favourable trends has come with the release of KLM's financial results for the first quarter of this year which are well up on the 1963 results. Before this year is out the government is expected to agree to the reorganization of KLM's finances to put them on to a more rational basis. But probably of even more positive assistance will be the approval of orders for jet aircraft to take over the short- and medium-haul European routes, for it is not easy to see how KLM will achieve financial security until it puts its European network on to an economic footing. TWA'S QUICK TURNROUND THERE is nothing amiss about the jaunty style in which the 1963 report of TWA is written; the story told in this report is of an airline which has staged a comeback which is fabulous in the real meaning of that word. In 1961 TWA lost $27m. In 1963 TWA made a profit of $20m. These bald facts convey the transformation during the past year of an airline whose days only recently seemed numbered. This transformation has, to a large extent, been brought about by a sharp reduction in unit costs. Compared with the pre-jet cost level of about 30 cents per c.t.m., 1963 saw the cost level drop to 22 cents. As a result the break-even load factor fell to 43 per cent. Philippine Air Lines' executive v.p. Captain Roberto Lim signs a contract with Fokker for two Friendships on board a Friendship flying from Roxas to[Manila. It was PAL's eighth F.27 contract, bringing the feet to 13 Prince Caracciolo left), president of Italy's domestic airline Itavia, ac- cepts the logbook for his company's third Herald from Mr. £. P. Hessey, Handley Page sales manager, at Radlett aerodrome But of probably greater significance than this was the remarkable surge forward in the scale of TWA's operations. For the previous four years the level of TWA traffic had remained static, this being partly due to uncompetitive equipment but also due to the fact that TWA had become a sick airline. During 1962 some strong medicine was administered and the indications were that this treatment was going to be effective. As with many a convalescent, the crucial moment came—probably early in 1963—when the patient began to recover his self-confidence. And with a new-found enthusiasm and esprit de corps, TWA swept forward into top gear. Aircraft utilization rates rose again to reach record levels. Regularity and punctuality were better than ever before. Sales promotion took on a new aggressiveness. Factors such as these brought an additional million passengers to TWA in 1963 compared with 1962. Domestic services, which still account for about three-quarters of TWA's operations, showed a traffic increase of 19 per cent as against an average for the US trunk carriers of 14 per cent. Even more startling was TWA's 39 per cent increase in international traffic, a rate of growth which pushed TWA's share of the North Atlantic market up from 14 to 17 per cent. But perhaps the most revealing statistic of TWA's turnround is derived from the 16,000 letters received last year from its customers: for the first time on record, the compliments outnumbered the complaints by a handsome margin. ENTER THE PURE-CARGO JET ELSEWHERE in this issue there appears an account of the engineering background to Lockheed's mammoth development of the C-141 military jet freighter. The recently announced orders by the Flying Tiger Line and Slick Airways for eight and four L-3O0BS respectively mark the end of probably one of the most exhaustive exercises ever undertaken by a manufacturer to get a basically military aircraft right for the civil market. That the process could be so thorough is one of many benefits accruing from Lockheed^s fortunate position of expecting to break even on the US Air Force s first firm order for 132 C-141s. Tiger and Slick pioneered the use of modern turbine aircraft for long-range freight operations with their orders for Canadair CL-44s and time will undoubtedly prove the latest orders to have been equally prophetic and trend-setting. Though not the first large jet freighters to be bought—a total of over 50 side-loading 90,0001b payload mixed-traffic Boeing 7O7-32OCs and Douglas DC-8Fs have now been ordered by world airlines—the 110,0001b- plus payload L.300B is the first-ever really long-range freighter designed from scratch, jet or propeller. Military contract work on a large scale is obviously being counted upon, just as it was initially with the CL-44s, but the aircraft's sheer economics of size seem to promise great freight expansion. Mr R. W. Prescott, president of the Flying Tiger Line, has said: "I believe this aircraft will be the key factor in an antici- pated sevenfold growth in air-cargo during the next decade, operating efficiencies and performance will permit the air cargo industry to compete effectively with long-haul motor trucks an
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