Competing with the Freeways

Clotted traffic on the ground often forces today's air travelers to spend as much time struggling to the airport in their cars as flying to their destination. For passengers from California's suburban Orange County, the frustration of an hour's drive to Los Angeles International Airport to catch an hour's flight to San Francisco seemed particularly ridiculous. County officials pleaded in vain with major airlines for direct service from Santa Ana to upstate points. Then, where the established carriers feared--or at least failed-- to go, five young men with no aviation experience dared to start an airline of their own.

With only two planes (Lockheed turboprop Electras), about 160 employees and the San Francisco-Orange County route that nobody wanted, Air California has snared an impressive and rapidly growing volume of business. By last week, when it flew its 80,000th passenger, the five-month-old airline had taken in $1,000,000 in revenue, revved up its schedule from five to a minimum of seven flights a day each way, and ordered two more Electras to expand service. Explained Air California President J. Kenneth Hull: "We're in competition with the freeways."

A Need for Branches. Actually, the infant airline is also battling five other carriers: Pacific, Pacific Southwest, Western, United and TWA. Last year the big boys hauled 4,000,000 passengers over the 347-mile run between San Francisco and Los Angeles, the world's most heavily traveled air corridor. The idea that the corridor needed more branches struck Economist William E. Myers, 32, as he wrestled with Orange County statistics at his small market-research firm in Newport Beach. After all, with a population up from 216,000 in 1950 to 1,200,000, Orange is the fastest-growing metropolitan county in the U.S. As the home of Disneyland and the American League's California Angels, it attracts thousands of out-of-town visitors. On his own, Myers began assembling data in the hope of selling a study to an airline. In December 1965, he mentioned his findings to another market researcher, Alan H. Kenison, then 27. Asked Kenison: "Why don't you start your own airline?"

Before taking that plunge, Myers and Kenison rounded up three friends to help: Adman William L. Pereira Jr., 29, son of the famed architect-planner; Lud Renick, 37, a realty and restaurant investor; and Lawyer Mark T. Gates, 30. "None of us knew what we were getting into," recalls Pereira. "At first, it didn't look too difficult. If we'd known, we probably would not have started." Sensibly, their first move was to recruit two veteran aviation consultants: Thomas Wolfe, 65, a onetime vice president of both Western and Pan American, who is now Air California's chairman, and Hull, 66, onetime president of Lockheed Aircraft Service. With their guidance, the group steered its way safely through the labyrinth of state and federal approvals to operate. They managed to raise $5,300,000 amid last year's tight-money squeeze, including a $2,500,000 public stock offering, which was largely snapped up by enthusiastic local residents.

Local Loyalty. Now Pacific Southwest, which operates entirely inside California, has asked approval to fly the Orange County-San Francisco run, but so far the state has withheld permission. For its part, Air Cal woos local loyalty through such amenities as free airport parking, quality booze (Chivas Regal, Beefeater, Jack Daniel's) for the standard $1 tab, and eye-catching stewardesses' uniforms (orange and ochre with Spanish-style capes and hats). More than half of its stewardesses are Orange County housewives who quit other airlines to marry. They are, of course, happy to fly again with the line that gets them home every evening.

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