Big Fifth?

After a Washington meeting several years ago, a group of airline men were scrambling to get into the same cab. One of them was Eastern Air Lines' Captain Eddie Rickenbacker. Another was Delta Air Lines' President C. E. Woolman, whose web of routes from Charleston, S.C. to Fort Worth had long acted as feeder lines into Eastern Air Lines' lucrative routes from Florida to New York and New England. Would Woolman mind letting Eddie sit on his lap for a short ride? Cracked Woolman: "Well, Eddie, I've been helping support you for years, so I might as well do it some more."

Last week Delta's big (6 ft. 1 in., 210 Ibs.), 6 -year-old Collett Everman Woolman was all set to dump Captain Eddie off his lap. Woolman got together with Northeast Airlines, Inc.'s President George E. Gardner on a plan to absorb Northeast, which runs from New York through New England to Montreal.

Green Light? The deal--to be accomplished by a stock swap on the basis of book value--was by no means clinched. It depended on 1) approval by CAB of a pending Delta application for a route into New York from Atlanta (through Columbia, S.C.), which would connect up with the Northeast system, and 2) CAB approval of the merger itself. If approved, the merged lines would provide through service from Montreal and New England clear down to Miami, in direct competition with Rickenbacker's north-south business.

The merger proposal was bound to cause a fight. Captain Eddie was sure to oppose it. So was National Airlines, which also runs down the east coast. National and Eastern had battled Delta once before when it tried to get into New York, on grounds that the New York-Miami run could not support another carrier.

Nevertheless, both Northeast's Gardner and Delta's Woolman thought they could eventually get CAB's green light. Said Woolman: "This [type of] merger is what CAB . . . has been asking for. It is not a shotgun wedding, but something both want to improve operations."

Black Ink. The merger would certainly be good for both lines, since Delta's big load of tourist traffic to Florida comes in the winter, and Northeast has its tourist load in the summer. Said Northeast's Gardner: "If the merger goes through, there'll be a way to make the horses work all the time instead of leaving them in the stable to eat up the profits." Furthermore, Delta, which lost eight of its top men in a 1947 crasb, would have its management bolstered; the new combination would be bossed by Woolman with the help of Gardner as a director, and staffed by executives from both lines. Because there are no overlapping routes, few, if any, employees would be fired.

Of the two lines, Delta is by far the larger (32 planes, including six DC-6s, v. Northeast's 13 planes and no DC-6s) and longer. Its 3,937 miles of routes are almost four times as long as Northeast's. Delta is also the more profitable: during the past three years its net has increased fourfold to $815,751; in the first eight months of this year, Northeast netted only $274,000. With both ends of the combination getting more long-haul traffic, Delta and Northeast figure that their total business would jump by 50% under the merger. Together, they would serve 75 cities in 22 states, and hope to become the fifth biggest domestic airline.*

*After American, United, Eastern and T.W.A.

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