Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-08-14

cut the Air Forces equipmel
cancellations to many manufi
Last week the Civil Aeron
airlines in effect to tighten
their budgets by turning down
their request for an emergency
6 per cent passenger fare
increase.
One Of the factors in the
CAB action was the statement
by the Bureau of Air Opera
tions which charged that air.
lines operations were inefhcient.
Just what is happening in
the aviation industry. the
firms which build and fly COM
mercial aircraft?
Feeder Airlines In Red
Short haul feeder airlines.
now receiving more than $50
million a year in subsidies, say
they will fall even deeper in
the red unless a means can be
found to finance new equip
ment.
Shortly after the Air Force
cut back its orders, North
American. Douglas. CurtiSS-
Wright Corp. and Boeing an
nounced they were releasing or
planned to release more than
10000 employees in the next six
months.
About the only bright spot
seems to be the makers of pri-
vate and business aircraft, who
almost daily score new produc-
ton and earnings records.
The biggest howl seems to
come from the airlines.
They quickly denied that
they were operating inefh-
GENTLY.
Outstanding" Says Eastern
Harold Russell of Eastern
AirlineS said the Bureau Of Air
Operations report was out
landiSh and and called it "a
terrible indictment"
Trans World Airlines said
the action seems unrealiStic
and is certainly disappointing.
The strongest public criti-
ciSm Of the boards action came
from CAB Vice Chairman
Chan Quincy, the lone dis
senter in the Al ruling.
The majority has not in
my opinion met its response
bility." said Mr.. Quincy. I'm
fact the overall need is so
urgent their decision may be
calamitous to the industry"
The airlineS that asked for
the emergency increase Delta,
TWA. Braniff. United, Eastern.
American. Capital and North
west-have reported diminish
ing profits for more than
year. They also have on order
more than 50 billion worth Of
Jets and turboprop airliners
that they have yet to finance.
Four Running in Red.
Four of the airlines-Capital.
Northwest, United and TWA-I
have filed financial statements
showing that they are operat-
ing in the red for 1857.
Hubert A. Schneider. counsel
for Braniff. told the CAB that
If this trend continues We are
headed for real trouble"
Mr.. Schneider said the trav-
cling public has not opposed
the proposed increase. THE
only opposition has come from
the staff of this agency (the
CAB which is charged with
the development of the in
dustry"
Speaking for the Bureau Of
Air Operations. George Cosson
said the decline in airline
profits was due primarily to-
load factors. He said the
bureau considered reasonable
earnings for the airlines,
proper use of facilities, depre-
citation and taxes.
When so considered it is
clear the airlines have not sup
ported their case" he said.
mild Panic Reported
Industry publications. how
ever, in the past months have
repeatedly voiced the opinion
that mild panic" exists both
inside and outside the airlincs
over their financial situation.
They say-and airline OIL
Gals unhesitatingly agree
that airline stocks have suf-
fered heavy losses on the mar
ket and that investment trusts
have withdrawn money from
airline support.
Airlines officials add that
eventually an 8 to 10 per cent
fare increase will be needed
within the next few years or
the Government will have to
help with subsidies. They
blame higher repair and fuel
bills, coupled with the fact that
their planes cannot carry
enough passengers fast enough
and far enough to pay for the
higher costs.
Delta President c. E. Wool