Delta Air Lines and the Boeing 747-100

On 9 September 2015, the very first Boeing 747-400 built, N661US, touched down at Atlanta from Honolulu as Delta Flight 836 for the last time in revenue passenger service. Ship 6301 was the Boeing 747-400 prototype which was then delivered to launch customer Northwest Airlines on 8 December 1989 and came over to Delta with the 2008 merger. There are twelve remaining 747-400s flying with Delta, all of which came over from Northwest. Current fleet planning will have these 747s retired in 2017. Delta did however, for a brief time, operate the first variant of the 747 family, the 747-100, from September 1970 to April 1977. Only five aircraft were taken on strength with Delta and while the 747-100 was but a short historical footnote in Delta’s history, its legacy looms large to this day with the airline.

My own profile art of Delta’s first 747-100, N9896 “Ship 101” as it looked on her delivery in 1970.

(JP Santiago)

In order to understand what the 747 was for Delta at the time, one has to consider that as the 1960s were drawing to a close, Delta was in the midst of transition on several fronts. The first change change came with the Southern Transcontinental Route Case of 1961. Prior to deregulation, airlines often had to make a case for the opening of new services and routes to the Civil Aeronautics Board. Often these cases consisted of years of deliberation and often politics played a central role in airlines winning favorable rulings from the CAB. In the 1950s, the CAB favored interchange services as a means for airlines to open up new markets without saturating a given route with an excess of seats, harming profitability. Having a predominantly Southeastern US-anchored network, Delta linked up with several other airlines to offer interchange services which allowed it to fly as far west as California. As traffic grew on the interchange services to the West Coast, Delta petitioned the CAB to operate the West Coast services on its own and in one of the more historic decisions made by the CAB, both Delta and National were given route authorities to California from the southeast in what was called the Southern Transcontinental Route Case. Starting in 1961, the previous interchange agreements were declared redundant and Delta opened up a range of nonstop services to San Diego, Los Angeles, and San Francisco from Atlanta, Dallas, and New Orleans. Within a year, Las Vegas was added as well as Miami which for the first time made Delta a transcontinental airline. By 1963, the CAB permitted Delta to carry West Coast traffic to its Caribbean destinations via New Orleans and onward to Florida (Orlando and Miami) via Atlanta. In an unrelated decision by the CAB, Delta was allowed to interchange on routes to London from Washington Dulles with Pan American and soon Delta’s DC-8s were flying to Europe as part of that interchange agreement.

The second and biggest of these changes came with the death of Delta’s founder, C.E. Woolman, on 11 September 1968. In his 1841 essay “Self-Reliance”, Ralph Waldo Emerson wrote that “An institution is the lengthened shadow of one man...all history resolves itself very easily into the biography of a few stout and earnest persons." From Delta’s founding in 1927 to his death in 1968, no other individual was so closely identified with Delta than C.E. Woolman. He became the airline’s president and general manager in 1945 and became its chairman of the board only a year before his death. Though viewed as a stern autocrat by the press, Woolman was beloved by Delta employees. On his 25th anniversary with Delta, the employees presented him with a new Cadillac and though he had own several other cars, he kept that Cadillac until he died. Though ably succeeded C.H. “Charlie” Dolson, W.T. “Tom” Bebe and David Garrett, there was no question it was still Woolman’s airline for years to come.

The last change that frames the selection and operation of the Boeing 747-100 by Delta was its 1972 merger with Northeast Airlines. Throughout its history, adversity plagued Northeast which always seemed be hobbled by the CAB with a small network and when Northeast finally did break out of New England in 1968 with new routes to Florida, it ran square into the crosshairs of Eastern which was the incumbent giant of the US East Coast at the time. With Northeast literally going from cash crisis to cash crisis, its New England route authorities soon proved to be ripe for acquisition via merger. The first suitor was Northwest Airlines in 1969. Interestingly, the CAB approved the merger in 1970 but it would be without some of Northeast’s more attractive route authorities like Miami-Los Angeles. Northwest withdrew its merger offer in 1971 as a result. Eastern and TWA then offered merger terms, with Eastern in particular seeing a merger as a way of knocking a competitor out of the New England-Florida market. Those negotiations also fell through and ultimately it was Delta that came through with a suitable merger offer that also met with the approval of the CAB. On 19 May 1972, President Richard Nixon signed off on the Delta-Northeast merger (since foreign routes were involved).

So these are three events in which to put the context of the Delta’s order of the Boeing 747-100- the Southern Transcontinental Route Case of 1961, C.E. Woolman’s death in 1968, and the merger with Northeast Airlines in 1972.

Prior to the launch of the Boeing 747, the “big jet” of the day were the Douglas Super Sixty series DC-8s which had surpassed the Boeing 707 in utility and passenger capacity. While the 747’s launch has been historically associated with Juan Trippe and Pan Am, at the time, Boeing was keen on getting one up on Douglas and the 747 was the aircraft that would capture the “jumbo” jet title from the DC-8 Super 61/63. Delta representatives had visited Boeing to view the progress on the 747 program and were suitably impressed with the aircraft. Despite their favorable views on the 747 though, it was clear to all of Delta’s management from the outset that the 747 was too much airplane for the airline which had a predominantly short- and medium-haul route network with its longer routes suitably (not to mention cost-effectively) served by the DC-8 fleet. On the other hand, two of Delta’s biggest competitors, Northwest and American, had already placed orders for the 747. Delta’s fellow “southern transcontinental route” airline, National, was also expected to place orders for the 747 as well. The writing was on the wall- Delta’s DC-8s were no match for the expected spacious comfort of the big Boeing and the prudent move was to get the 747 as well, even if was just a small number on a temporary basis. In April 1967, Charlie Dolson, the airline president of the time, announced Delta’s order for three 747-100s for $20 million each with options for two more aircraft. It marked the very first time that Delta had ordered from Boeing. Preparations were made at six Delta destinations and three alternate cities for operation of the massive jet. When Pan American launched the world’s first 747 passenger services in January 1970, Delta had two representatives aboard the inaugural passenger flight.

Delta marketed the upper deck lounge of its 747s as the “Private Penthouse”.

(JP Santiago)

While Delta was making preparations for the arrival of the 747, it was carefully considering its future widebody needs which were better met by a smaller aircraft in the form of either the Douglas DC-10 or the Lockheed L-1011. Delta’s technical staff liked both aircraft and it was believed the DC-10 was favored given Delta’s long association with Douglas Aircraft and its extensive use of both the DC-8 and DC-9 in the 1960s. Delta’s close association with Douglas as one of its most loyal customers was the product of a friendship between C.E. Woolman and Donald Douglas. In the 1960s, Douglas encountered repeated financial and technical difficulties with both the DC-8 and DC-9 programs that resulted in financial losses that led to its merger with McDonnell Aircraft in 1967 which effectively put Donald Douglas out of the executive suite. And keep in mind it was the following year that C.E. Woolman passed away. In a sense, Delta was now a “free agent” no longer tied to Douglas. Lockheed, eager to put its reputation back on good standing after the issues with the Lockheed L-188 Electra, pulled out all the stops in the Tristar program, engaging potential airline customers aggressively and early on in the Tristar development, resulting in an aircraft that at least in Delta’s eyes, was practically custom-built for them. Delta did, however, order five DC-10 Series 10s as insurance against the Tristar program when Rolls Royce ran into serious financial trouble during the development of the RB.211 engine used on the Tristar.

Delta’s 747-100 order was fulfilled quickly with N9896 being handed over to Delta on 25 September 1970 with the aircraft arriving in Atlanta to great fanfare on 2 October 1970. N9897 was delivered on 25 October 1970 and N9898 was delivered on 18 November 1970. While Pan American was first to launch 747 services on 22 January 1970 on its New York JFK-London Heathrow route, mostly domestic 747 services were launched in quick succession that year:

25 February: Trans World Airlines, New York JFK-Los Angeles (first domestic 747 service)

2 March: American Airlines, New York JFK-Los Angeles

26 June: Continental Airlines, Chicago-Los Angeles-Honolulu

1 July: Northwest Airlines, Chicago-Seattle-Tokyo

23 July: United Airlines, New York JFK-San Francisco

25 October: National Airlines, Miami-New York, Miami-Los Angeles

25 October: Delta Airlines, Atlanta-Dallas-Los Angeles

21 December: Eastern Airlines, New York JFK-Miami

15 January 1971: Braniff International, Dallas Love Field-Honolulu

By the end of 1970, Delta put the other two 747-100s into service with flights to Chicago, Detroit, and Miami. The options for the two aircraft were exercised the following year with N9899 being delivered to Delta on 30 September 1971 and N9900 arriving on 11 November 1971. While Delta’s 747-100s flew amongst Atlanta, Dallas, Los Angeles, Chicago, Detroit and Miami, they were also put to use on the Pan Am interchange services between Washington Dulles and London Heathrow. In the space of just over ten years, Delta went from a mostly regional airline anchored in the southeastern United States with some Caribbean routes to a transcontinental airline operating the Boeing 747 with limited interchange services to London. Never before in Delta’s prior history had it grown so much. But its fleet was quite diverse as a result of the merger of Northeast Airlines- it had twelve different aircraft with eight different engine types in service- in August 1972, Delta had three variants of the Douglas DC-8 in service, three variants of the Douglas DC-9, two variants of the Boeing 727, the Boeing 747-100, the Convair CV-880, the Fairchild-Hiller FH-227, the Lockheed L-100 Hercules for its cargo division, and it was anticipating the arrival of both the Lockheed L-1011 Tristar and the Douglas DC-10! In the interests of reducing the maintenance costs, standardizing operations, and holding down spare parts inventories, the fleet types had to be pared down. By this point, David Garrett had become president of the airline and it was his legacy that Delta streamlined its fleet which gave it record breaking profits in the late 1970s. Garrett’s primary imperative was fuel savings- the 1973 OPEC oil embargo that followed the Yom Kippur War in the Middle East caused a sharp spike in the cost of fuel.

The Pratt & Whitney JT9D was the first production high bypass turbofan used on a production airliner.

(JP Santiago)

For smaller markets and the short- to medium-haul flying, Delta standardized on the Douglas DC-9 Series 32. For medium-sized markets and medium-haul flying, Delta standardized on the Boeing 727-200. It had acquired them via its merger with Northeast Airlines and found them to have superior economics to the Convair CV-880s and to some degree even the DC-8s. In addition, the 727-200 used similar Pratt & Whitney JT8D engines as the DC-9. There were thirteen 727-200s that came over with the merger with Northeast and Delta wanted more- in March 1972, Delta returned to Boeing once again, this time with an order for fourteen 727-200s (the order was placed before final approval of the Northeast merger by President Nixon)- Boeing even took Delta’s remaining Convairs as a trade-ins on the 727 order. By 1977, there would be 88 727-200s in Delta’s fleet. Delta’s first experience in working with Boeing on the 747-100 order was so favorable the airline was eager to work with Boeing quite readily again. The arrival of more 727-200s allowed Delta to dispose of the Convairs and the oldest DC-8s first. While most of the Series 51s and Super 61s were sold off, a sizeable number were kept on for several more years with some of the Super 61s getting the Cammacorp re-engining with the CFM56 to become Super 71s.

By this point it was clear the Lockheed L-1011 Tristar would be the long-haul workhorse of the Delta fleet. The DC-10s were eventually sold off to United. The first Tristar arrived in Atlanta on 12 October 1973 with the first passenger services on 15 December 1973 on the Atlanta-Philadelphia route. By 1974 there were ten Tristars in service but their spacious underfloor cargo holds meant they carried 25% of Delta’s cargo despite being less than 10% of the fleet. That allowed the L-100 Hercules transports to be sold off that year. When the Boeing 747-100 was ordered in 1967, it was with the understanding it was too big of an airplane for Delta but it was needed to compete in the marketplace. With the Tristar quickly proving itself, the 747-100’s days were quickly numbered and arrangements were made for the first two 747-100s to be sold off but the last three stayed on just a bit longer until more Tristars were in service. Delta’s last Boeing 747-100 service was flown 23 April 1977 Las Vegas-Atlanta.

Of the five original Delta 747-100s, only the first one, N9896 “Ship 101” can still be seen today at the Evergreen Aviation Museum.

(JP Santiago)

The fates of Delta’s five 747-100s:

N9896: Returned to Boeing 1974, leased to China Airlines 1976-1978, operated by Pan Am 1978-1991, then flew with Evergreen International. Preserved at the Evergreen Aviation Museum in 2010 (it’s on the roof as part of the waterpark with waterslides coming out of it!)

N9897: Returned to Boeing 1977, operated by Flying Tiger 1977-1989 (leased to El Al Israel for a year), operated by FedEx 1989-1991, operated by Air Hong Kong 1991-1996, then Polar Air Cargo, now scrapped.

N9898: Returned to Boeing 1975, operated by China Airlines 1975-1976, leased out by Guiness Peat Aviation 1976-1984, operated by Pan Am 1984-1991, operated by Evergreen International starting in 1991 and converted to a water bomber “Evergreen Supertanker”, retired with Evergreen’s bankruptcy in 2013. In storage at Pinal Air Park.

N9899: Returned to Boeing 1977, operated by Flying Tiger 1977-1989 (leased to El Al Israel for a year), operated by FedEx 1989-1991, operated by Air Hong Kong 1991-1995, then Polar Air Cargo, now scrapped.

N9900: Returned to Boeing 1977, operated by Flying Tiger 1977-1989, operated by FedEx 1989-1993, operated by Air Hong Kong 1993-1994, operated by Kalitta 1994-2008. Stored at Oscoda, then scrapped 2015.

As an interesting historical footnote, the first officer on the delivery of Delta’s first Lockheed Tristar was Captain Jack McMahan who at the time was one of only two men in the United States certificated to fly the DC-10, L-1011 and 747. The other pilot was an FAA examiner. He was asked by a reporter on his impressions of all three widebodies- he praised the handling of the DC-10, the overall design of the 747, and the advanced systems of the L-1011. He remarked “Flying the three planes is like going out with three sisters. They have the same background but different personalities!”

This article was originally posted on AirlineReporter.com on 23 October 2015.

Sources: Delta: The History of an Airline by W. David Lewis and Wesley Phillips Newton. University of Georgia Press, 1979, pp 340-392. Delta: An Airline and Its Aircraft by R.E.G. Davies. Palawdr Press, 1990, pp 76,80-86,96-97. 

The Rise and Fall of Mohawk Airlines and Opening the Door for Frank Lorenzo

Robinson DC-3 crew with Robert Peach on the far right

In the days following Pearl Harbor, the US Civil Aeronautics Board suspended all awards for new air services given the wartime situation. However, the CAB soon realized that air services would need to expand the support the growing production effort for the war. On 11 July 1944 the CAB issued an judgement that created a new category of airline called a feeder or local service airline that would funnel passengers and goods from smaller communities to larger cities for connections to the large established trunk airlines of the day like the "Big Four" of United, Eastern, American, and TWA. One of the early pioneers to take advantage of the CAB's decision was an aerial photographer and inventor named C.S. Robinson in Ithaca, New York. His work with aerial photography before the war led him to developed a metal spring like shock mount for his cameras that was superior to the rubber mounts of the day that became hard at high altitude. Robinson's factory to support the war effort was in Teterboro, New Jersey and he commuted between Teterboro and Ithaca in his Fairchild 24. Finding a constant stream of people who wanted to hitch a ride with him to New Jersey, he decided to start his own airline to connect upstate New York to the New York/New Jersey area and on 6 April 1945 Robinson Airlines began airline services from Ithaca and New York City using three Fairchild 24s. With traffic growing, Robinson expanded to larger aircraft and hired pilots as fast as he could to meet demand. One of his new hires was a former Navy patrol pilot and lawyer named Robert Peach. 

Peach was decorated Navy pilot in the Pacific with two Distinguished Flying Crosses and at the time he joined Robinson Airlines, he was finishing law school at Cornell and wanted to get back into flying part-time. With the rapid growth of demand out of Ithaca, Robinson's laid back management style wasn't conducive to a growing airline and the finances according suffered in the immediate years after the end of the Second World War. Edwin Link, the developer of the Link Simulator that was vital to training pilots, had a factory in Binghamton, New York and was willing to invest in Robinson if there was a change of leadership to assure a return on his investment. Link provided the seed money to allow Robinson to upgrade to Douglas DC-3s and by 1952 Robert Peach had risen through the ranks to Robinson to gain the attention of outside investors. He ended up buying Robinson Airlines outright which assured Link's continued investment in the airline. One of his first acts as head of the airline was to hold a contest to rename the airline and that's how it became Mohawk Airlines. 

Robert Peach at the christening of Mohawk's first One-Eleven

Link's investments weren't enough for Mohawk as Peach pushed for an increase in the usual subsidy the CAB gave to local service airlines. It was a role that raised Peach's prominence in the airline community as he advocated for more support for the smaller airlines. In those days, the CAB had a subsidy given to airlines for routes they flew and Peach pushed for the CAB to treat local service airlines like Mohawk on the same basis as the large established trunk airlines. At the time the Eisenhower Administration wasn't too keen on the idea of increasing subsidies to local service carriers, but Peach and the other local service carrier heads had two important allies- one was Donald Nyrop, the head of the CAB at the time (who later became the head of Northwest Airlines) and Texas Democrat Representative Lloyd Bentsen. When the CAB opened up for applications for local service carriers in 1945, certification was provisional. Bentsen's proposed legislation would make certification of the local service carriers permanent, placing them on better footing with the established trunk carriers and opening the door to increased subsidies from the CAB. President Eisenhower signed the bill after it was unanimously passed by both houses of Congress in 1955. 

Mohawk's BAC One-Elevens increased its stature in the industry

Beginning 1962 Mohawk under Peach's leadership grew tremendously. I had previously written about Mohawk's fight to acquire jet equipment in the form of the BAC One-Eleven that culminated in Peach winning the fight and the first Mohawk BAC One-Eleven, christened "Ohio" flew its first revenue services on 25 June 1965. In addition, Fairchild-Hiller FH-227 turboprops were also put into service to replace the piston twins with Mohawk reaching its zenith in 1967 with route awards from the CAB to Detroit, Cleveland and Boston. The floor fell out from underneath Robert Peach and Mohawk Airlines in 1968. On 23 June that year, the BAC One-Eleven "Discover America" crashed on a flight from Elmira, New York, to Washington, DC. The cause was a valve failure in the APU that resulted in an inflight fire that compromised the tail structure. Two weeks later, a new air traffic controllers union called Professional Air Traffic Controllers Organization (PATCO) that started in New York City staged a slowdown to protest inadequate staffing and excessive overtime. Working to the letter of the rules, air traffic back up around numerous chokepoints that led into the New York City area. From July to August, the PATCO action proved disastrous to many airlines, but more so to Mohawk given its route structure. Peach even tendered a bill to the FAA for costs incurred during the PATCO slowdown as a protest. In the following year, a general downturn in the economy then hit Mohawk's passenger numbers. By 1970, the nation was in recession and every airline was losing money and this further added to Mohawk's woes. To save costs, many local service carriers were handing off services to smaller cities to commuter airlines with the CAB subsidy "flowing through" from the local service carrier to the commuter airline. Mohawk's rival, Allegheny Airlines, was already doing this with their "Allegheny Commuter" brand. The CAB permitted this as long as the local service airline would step back in should the commuter airline cease services to any of the communities. 

Frank Lorenzo at the time of his takeover of Texas International

At Mohawk, the pilots saw the outsourcing to commuter airlines as a threat to their jobs (some things in the airline industry never change and this is still a contentious issue in airlines today). One minute before midnight on 12 November 1970, the pilots went on strike after the failure of negotiations and Mohawk was essentially shut down as an airline. The debts that Mohawk incurred upgrading to the BAC One-Eleven and FH-227 aircraft were piling up against declining traffic. The pilot's strike was a nail in Mohawk's coffin as the management turned to a small New York City aviation consulting firm to assist with a turnaround. This small firm was Jet Capital, founded in August 1966 by two Harvard business school graduates, Frank Lorenzo and Bob Carney. With a small office in the prestigious Pan Am building in Manhattan, Lorenzo and Carney had a stock offering in January 1970 that netted them $1.5 million in "seed money". They had earlier provided financial consulting to Detroit-based cargo airline Zantop  that got their name out in the industry. Lorenzo met with Robert Peach on numerous occasions and Jet Capital offered Mohawk a restructuring plan that essentially resulted in Lorenzo controlling Mohawk Airlines. At the time, Lorenzo was only 30 years old- and his plan to take over Mohawk was a bit much for the Robert Peach and the board to swallow. With the airlines' fortunes waning quickly, Peach instead allowed his long time rival Allegheny Airlines to purchase Mohawk. By this time the slow slide of Mohawk meant that Peach had less control over Mohawk than what was the case in 1967. On 20 April 1970, he had lunch with Frank Lorenzo thanking him for his services and offer but that the board had decided to sell to Allegheny. After lunch, Robert Peach went home to prepare for a speech he was to give that night, but instead shot himself in the head, the loss of Mohawk too much to bear for him. 

Robert Peach wasn't only airline boss to kill himself after dealing with Lorenzo. That will be the subject of a future post on this blog as we track Frank Lorenzo's rise to prominence in the airline industry. The sale of Mohawk to Allegheny left Jet Capital with its seed money from its stock offering burning a hole in their pockets. Lorenzo came tantalizingly close to getting control of an airline, something he had long wanted since he was a teenager. In 1971, Mohawk wasn't the only airline in need of a financial turnaround. Based in Houston was Texas International and it wasn't long before they engaged Frank Lorenzo's services that year. But you'll have to wait for another blog article to find out how that went.....

Source: Airline Executives and Federal Regulation: Case Studies in American Enterprise from the Air Mail Era to the Dawn of the Jet Age by Walter David Lewis. Ohio State University Press, 2000, pp 295-318. Hard Landing: The Epic Contest for Power and Profits That Plunged the Airlines into Chaos by Thomas Petzinger. Times Business/Random House, 1996, pp 38-43. Photos: Historical Images (historicalimages03 on eBay), Wikipedia, PostcardPost.com

The Rise of Coach Class Airfares

Prior to the Second World War, several small airlines tried to break into the market by offering low fares, but none of them survived as at the time, passenger operations were only sustainable at charging fares that were roughly 10 cents a mile. The first serious attempt at low fares on a sustained basis came from United Air Lines which started what it called "Sky Coach" service on 10 April 1940 between San Francisco and Los Angeles with intermediate stops with a fare over the whole route coming out to $13.90 (approximately 3.5 cents per mile). The reasoning for the Sky Coach service's low fares were that it would only use 10-passenger Boeing 247s that were already old and paid off, therefore cheaper to operate and would offer a less extravagant level of service than on United's primary services between the two cities. The "Sky Coach" ended on 23 April 1942 with the mobilization of the US airline fleet to support the war effort. 

In the immediate postwar period, the boom in air travel meant there were more passengers than seats and the airlines were in no rush to cut prices. In those days, fares were governed by the US Civil Aeronautics Board (CAB) and any rate cut had to pass their review as not being detrimental to the general interest of the industry and the route in question. If an airline wished to offer low fares, they had to provide rationale to the CAB to approve those fares in the days before deregulation. A growing number of charter and non-scheduled airlines, however, began to slowly nip away at the passenger market that was long the exclusive domain on the established trunk and local service carriers. These airlines offered low-frills services at cut rate prices that eventually forced the established airlines to act. The first out of the block with the first scheduled coach class service in the United States on 4 November 1948 was Capital Airlines on the lucrative Chicago-New York route. Capital charted only 4 cents per mile instead of the standard 6 cents per mile on the route established by the CAB. It justified the coach class fares to the CAB by using older Douglas DC-4s with high-density seating for 60 passengers. Only the minimum of inflight services was provided and the flights were scheduled at off peak hours and late at night so not to detract from Capital's own premium services. After approving Capital's coach class services, other airlines raced to establish their own coach class services and the CAB was so flooded with applications for approval that it was forced to issue a policy statement, apprehensive that the airlines would end up offering services that was out of balance with their operating costs:

"We would caution the carriers that the burden of proof for additional coach class service is clearly on them. We do not propose to allow the indiscriminate extension of coach fares, no do we intend to permit a general debasement of the existing passenger fare level."

Regardless, on a case-by-case basis, the CAB approved numerous other coach class services and within a year of Capital's ground breaking services, coach fares could be found on most major routes. On 27 December 1949, both American Airlines and TWA offered the first transcontinental coach class services on high-density seating DC-4s with several stops. The fares were around $110, and due to the success of the services, in less than a year both airlines replaced the elderly DC-4s with better equipment- American put DC-6s on the routes and TWA put Lockheed Constellations on the coach routes. Curiously, though, United refused to start its own coach services despite its own experiments in 1940 with the Sky Coach. William "Pat" Patterson, United's paternalistic president, warned that expansion of coach fares would lead to chaos in the market and ruin the fare structure of the industry. After holding out, United finally introduced its own coach services on 14 May 1950 with 60-seat DC-4s between Los Angeles and San Francisco at 3 cents per mile. United's services ran at night and at off peak hours until later than summer when Western Air Lines added its own daytime coach services. For the remainder of the year, United and Western fought a small fare war on coach services in California.

To get CAB approval for these services, the airlines had voluntarily imposed all sorts of restrictions on the fares from off-peak schedules, no discounts, no refunds, less on-board amenities, and reduced seat pitch. Most of this was done freely by the industry to protect their own premium services. In 1950 the CAB issued another policy statement that the objective of fares should be to balance the ratio of fares to seating standards so that the net revenue per flight should be the same, irrespective of the ticket prices. This had the effect of eroding many of the previous restrictions on coach fares due to competition- since an airline merely had to demonstrate to the CAB that the net revenue on a given route didn't change much, airlines began to incorporate coach class cabins on their regular flights. Coach fares were now available for daytime flights and peak times. As a result, United set its coach fares on all flights on the West Coast at 4.5 cents per mile and for flights within California, coach fares were set at 3.5 cents per mile. Much to United's surprise (and undoubtedly to that of Pat Patterson), United's coach fares were a huge success and the airline aggressively introduced coach class cabins on its transcontinental services between San Francisco and New York at only $110 on 25 September 1951. 

But the expansion of United's coach class cabins got the attention of the United States Senate's Select Committee on Small Business. The committee investigated the CAB decisions regarding coach class services and found that the Board had unfairly been favoring the established airlines and criticized the CAB's strict policies on charter airlines and non-scheduled airlines that had shown a market for low airfares. So in November 1951 the CAB reversed direction but instead of taking a more favorable approach to the charter and non-scheduled carriers, the CAB denied transcontinental applications of several carriers and instead directed the established airlines to expand coach class fares on their network. Many of the smaller airlines cried foul, but the political influence of the established airlines maintained the CAB's change in policy. The airlines now began to aggressively push coach class fares, particularly on the transcontinental routes by by 1952 the coach class fare between New York and Los Angeles had fallen to $99 and New York to Chicago fell to only $32. By 1955, coach class fares had grown exponentially to the point that on some routes, the coach class cabin took up more space than the first class cabins that once made up the entire cabin of airliners of the day. As traffic soared into the 1960s, the majority of airline passengers in the United States would travel via coach class fares, laying down the foundation for the beginnings of deregulation in the 1970s.

Source: Airlines of the United States Since 1914 by R.E.G. Davies. Smithsonian Institution Press, 1998, p336-338.

Mohawk Airlines Gets the BAC One-Eleven

When the BAC One-Eleven was developed, it faced competition from two other short-haul twinjets in the form of the Sud-Aviation Caravelle and the Douglas DC-9 Series 10. And further ahead lay Boeing's 737-100/200. BAC's sales team as soon as the One-Eleven was launched wasted no team in getting themselves set up in the United States, keen to follow on the success of the Viscount turboprop in the world's most lucrative air travel market. However, the BAC sales team found opposition not from the airlines, but from a completely different quarter.

Shortly after the launch of the One-Eleven letters of intent came in from local service carriers Ozark Air Lines (five aircraft) and Frontier (six aircraft). However, the US airlines of the day were tightly regulated by the Civil Aeronautics Board which not only set fares and routes, but also administered government subsidies to maintain "competition". The local service carriers of the day were particularly dependent on the government subsidies for what were usually uneconomic short-haul routes to smaller cities. In the case of Frontier and Ozark, the CAB felt that operating pure jets would require increased subsidies and threatened to withdraw financial support. As a result, Ozark and Frontier had to abandon their plans to buy the BAC One-Eleven.

The following year in 1962 Bonanza Air Lines signed a letter of intent for three One-Elevens. This time the CAB refused to guarantee Bonanza's loan and the purchase had to be canceled. When Bonanza was able to later on order the Douglas DC-9 Series 10 (as well as Ozark), accusations of protectionism flew from the British government and press.

Though success came with Braniff's order for six One-Elevens and options on six more (Braniff was much less dependent on government subsidies), the next local service carrier to order the One-Eleven, Mohawk Air Lines, was determined to make a case for operating the jet. When Mohawk ordered four One-Elevens, the CAB again tried to intervene and prevent Mohawk from getting jet equipment. The CAB stated in their denial that Mohawk's Convair twins carried on average 20 passengers and at least 30-35 passengers would be needed on the One-Eleven to operate without an increased subsidy.

Mohawk's president, Robert Peach, wasn't going to accept the CAB's verdict. In a very detailed rebuttal and analysis written by Peach himself, he pointed out that the CAB had just awarded Mohawk route extensions as well as nonstop route authorities between major cities in the Northeast that brought Mohawk in direct competition with the trunk carriers like American and United. Peach argued that modern equipment was needed to compete on these routes and that failure to acquire jets would mean an increase in subsidy would be needed for Mohawk to maintain those very routes.

Peach then detailed the rationale for the One-Eleven purchase, showing that operating the One-Eleven over a 200-mile route would break even at a load factor of 46%, something he pointed out that Mohawk had easily done historically. Mohawk wasn't getting jets for sake of getting jets, Peach concluded, the airline was doing it to meet economic and customer demand for modern aircraft on its route network.

It was one of the rare victories against the CAB that increased Robert Peach's stature amongst the other local service carriers. The CAB conceded and Mohawk operated their first BAC One-Eleven service on 15 July 1965 between Utica, New York, and New York City.

Source: BAC One-Eleven by Malcom L. Hill (Crowood Aviation Series). The Crowood Press Ltd, 1999, p25-27.