T.W.A.'s Comeback

Up from New York's Idlewild Airport last week roared a Trans World Airline Constellation, bound for a destination new to its crew: Ceylon. Some 41 hours and 10,000 miles later it put down at Colombo, the thriving capital. By week's end it was back with a cargo of 100 lbs. of Ceylon's finest tea, bandar Eliya (cost, $2.17 a lb.), a gift for T.W.A.'s officers for starting the first U.S. air service to the picturesque island. T.W.A. opened the route by extending its Bombay flight 1,000 miles to the southeast.

Ralph Damon, T.W.A.'s president, and Chairman Warren Lee Pierson, who looks after T.W.A.'s overseas work, hope to fly tourists and cargo in & out of Ceylon. They also have a bigger goal, plan to use Ceylon as a steppingstone, if the Civil Aeronautics Board permits, to fly on to Bangkok, a traffic-rich crossroads of the

East, and thence to Tokyo. There T.W.A. would link up with Northwest Airlines for service to the U.S. The CAB long ago approved a similar route (via Shanghai), but T.W.A., losing money hand over fist, did not want to fly it then.

At the rate T.W.A. is going now, it can soon afford to expand anywhere. Last week President Damon estimated a record 1952 revenue of $160 million, up 10%, and a net of $8,000,000, about the same as 1951. Damon, who inherited an accumulated three-year deficit of $18.6 million when he took over at T.W.A. in 1949 has since piled up $28 million in profits. One reason was that by putting the emphasis on low-fare air-coach service he made T.W.A. the biggest air-coach carrier in the world, flew 715 million coach miles last year. T.W.A. is adding coach flights to expand the service another 6%.

Handy Andy. Few airmen ever tackled a tougher job than Damon at T.W.A. But few men knew more of the aviation business from all sides. Damon has flown planes, sold them, built them, operated them. New Hampshire-born, Damon went to Harvard ('18, cum laude) to be an astronomer. But when he learned to fly as an Army pilot, the aviation bug got him. He joined Curtiss Aeroplane, became boss of a St. Louis branch in ten years, rose to president in 1935. In the late 1930s he learned about commercial air transport by joining American Airlines as vice president in charge of operations. In World War II the War Department asked him to boss Republic Aviation to speed up production of badly needed P47 Thunderbolt fighters. He returned to American in 1943, was named president two years later.

In 1949 Damon, who had been the star spokesman for 17 U.S. airlines against the "single flag" policy championed by Pan American Airways, was dismayed to learn that American's Chairman C. R. Smith had decided to join the enemy by selling Pan Am his transatlantic subsidiary, American Overseas. Said Damon: "There comes a time when a man has to stand up and be counted." He counted himself out of American. The same day, he got seven offers of jobs, took T.W.A.'s.

Millionaire Howard Hughes, who owns 74% of T.W.A. stock, had sunk $10 million of his own money into the airline, and Equitable Life had risked $40 million trying to bail it out. Under empire-minded Jack Frye, T.W.A. had expanded too fast, and piled up debts; retrenchment had trimmed its employees from 17,000 to 12,000. Morale was zero. Damon helped restore it by assuring the survivors that he carried no ax. Said he: "I'll judge everything by three standards: 1) how good a job is done, 2) how much it costs, and 3) how it helps the overall harmony." Knowing the tendency of departments to expand, he added: "Our slogan will be empire-building in reverse."

Take-Off. Soon after Damon came in, T.W.A. turned profitable. Modestly, he likes to say: "I've always had the good fortune to join a winning team just as it is starting to win." He explains that one decision had been put in motion by his predecessors, to consolidate T.W.A.'s two maintenance bases into one at Kansas City: "It was just waiting for me to say yes." This saved $2,000,000 a year.

But unquestionably, it was Damon, aided by T.W.A.'s Chairman Pierson, the financial boss, who put T.W.A. into sound enough shape so that it could sell $10.5 million of new stock to the public, modernize its whole fleet with $100 million worth of new planes, and pay for all but $6,000,000 of it out of the line's income.

Damon, who inherited a debt of $56 million and only $6,000,000 in stockholders' equity, has upped the equity to $53 million and held the debt to $60.5 million. "The sheriff has dropped back at least five steps," says he. "It's stopped him from leaning over my shoulder."

Flying Speed. All of T.W.A.'s pre-World War II equipment, including the five famed old Boeing Stratoliners. was sold off. The nucleus of World War II's Air Transport Command, they had flown for ten years and 25 million miles without a single accident.* With his 43 new Constellations (including ten Super Connies) and 52 short-haul Martins (including 40 pressurized 404s), Damon has greatly increased T.W.A.'s carrying capacity.

T.W.A. has also built up its own modest, but potentially important, system of "Point Four," under which it provides management know-how for airlines in Ethiopia and Saudi Arabia (it also owns 40% of Italy's Linee Aeree Italiane. 5 1/2% of Philippine Air Lines, 15 1/2% of National Greek Airlines). At home, T.W.A.'s once-demoralized management is a smoothly functioning team. Says Damon, grinning: "We've got a wonderful bunch of shrunken empires now."

* They are still flying. France's Aigle Azur airline is using them in Indo-China.

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