THEY MADE THE NEWS
Juan Trippe created Pan American Airways. Service began with a flight
from Key West to Havana on Oct. 28, 1927. The first Pan Am Flying Clippers pioneered global routes across the Pacific and, in the late 1930s, across
the Atlantic. When Boeing and Douglas introduced the first jets, Trippe
ordered plenty of them, and the jet age was begun. In the early 1970s,
he bought several 747s just as a world oil crisis hit. His business never
recovered. In 1991, a decade after his death, his airline expired.
C.R. Smith, longtime CEO of American Airlines, was one of the
founders of the U.S. airline industry. He was named president of American in 1934 and remained with the carrier until February 1968, when he
was appointed secretary of commerce by President Lyndon Johnson. He
was re-elected chief officer of AA in September 1973.
Eddie Rickenbacker was an American fighter ace in World War I.
He was also a race car driver and automotive designer. Rickenbacker’s
most lasting business endeavor was his lifelong leadership of Eastern Air
Lines, which grew to be the most profitable airline in the post-war era. In
the late 1950s, Eastern’s fortunes changed, and Rickenbacker was forced
out of his CEO position. He was chairman of the board until Dec. 31,
1963. Rickenbacker died in 1973.
Alfred Kahn, the economist who is commonly known as the “Father
of Airline Deregulation,” chaired the Civil Aeronautics Board in 1977
and 1978, the period leading up to passage of the Airline Deregulation
Act. As soon as the law was enacted, Kahn moved to the White House
to head President Jimmy Carter’s war on inflation as chairman of the
Council on Wage and Price Stability.
Frank Lorenzo was one the most inveterate dealmakers in the history of U.S. aviation. After taking control of Texas International Airlines
in 1971, he engineered a hostile takeover of Continental Airlines and
outraged labor by using bankrupty proceeding to tear up its union contracts. He also launched New York Air, formed a holding company called
Texas Air and later acquired Eastern, People Express and Frontier. It all
ended when Eastern collapsed in 1991.
Freddie Laker was a British entrepreneur who founded Laker Airways
as a charter carrier in 1966. The airline went bust in 1982, but not until
after Sir Freddie (he was later knighted) achieved his dream of operating
the Skytrain, a no-frill, no-reservation New York-London service that
was an instant hit with budget travelers. The business model was later
changed to include a business class. Laker died in February 2006.
Herb Kelleher could be the only U.S. airline executive to resolve a trademark dispute over a marketing
slogan by challenging the CEO of the slogan’s other
user to settle the matter in a boxing ring. Add to this
his multiple appearances at company events in Elvis regalia and his penchant for unforgettable quips,
and you have one of the industry’s most colorful
characters. But the co-founder and former CEO of
Southwest has his serious side, as evidenced by the
company’s solid earnings record and its high esteem
Richard Branson launched the Virgin brand of airlines in 1984 with
Virgin Atlantic Airways. In August 2007, after creating a succession of
airlines in Europe and Australia, he began flying Virgin America out of
San Francisco. Meanwhile, in September 2004, Branson announced a
deal under which a new space tourism company, Virgin Galactic, would
license the technology behind Space-
ShipOne, designed by American aero- Burt Rutan with a model
nautical engineer Burt Rutan. Virgin of his SpaceShipOne.
Galactic plans to make suborbital flights available to the
public by late 2009 with tickets priced at $200,000. Together Branson and Rutan formed the Spaceship Co. to
manufacture and market spaceships for the suborbital
personal spaceflight industry.
Responding to a rash of hijackings, the Nixon administration proposes
increases in the 8% domestic airline tax and the $3 international
departure fee to cover the cost of putting armed guards on U.S. airlines.
British Airways and Air France begin supersonic U.S.-Europe
operations, simultaneously launching service to Washington.
After the Supreme Court resolves a dispute over efforts by the
Port Authority to block the service in New York, Concorde
service comes to Kennedy Airport in November 1977.
After years of fighting regulatory battles on both sides of the Atlantic,
Britain’s Freddie Laker (later Sir Freddie) begins his Skytrain service, link-
ing New York and London (Gatwick) with a low-cost, no-frill scheduled
service that is an instant hit with backpackers
and budget travelers.
Congress passes the Airline Deregulation Act. Even before President
Jimmy Carter signs the bill, airline representatives queue up on the side-
walk outside the Civil Aeronautics Board to be first in line for new routes.
Midway Airlines begins service at its namesake downtown Chicago
Airport, the first new airline company to emerge since deregulation.
The move revitalizes the nearly abandoned airport as other carriers move
in. Midway and a reorganized successor airline, however,
do not survive the shake-out.
Pan Am begins implementing the first major airline merger after
deregulation, the acquisition of Florida-based National Airlines, after an
intense bidding war with Texas International. The verdict of history:
Pan Am paid too much, and the merger achieved too little.
Patco, the labor union representing the FAA’s air traffic controllers, goes
on strike, and President Ronald Reagan regards it as an illegal action.
When the union rebuffs a back-to-work order, Reagan fires over 11,000
controllers, forcing the FAA to take drastic actions to keep air traffic mov-
ing. Airlines are forced to revise their schedules to cope with the reduced
controller workforce. The system doesn’t recover for months
— some say years.
Braniff, one of the 10 “trunk,” or major, airlines when deregulation began,
halts all service on May 12, recalls all of its planes to Dallas/Fort Worth
and files for bankruptcy, a victim of an overly aggressive expansion strate-
gy developed by Braniff Chairman Harding Lawrence. Lawrence believed
that deregulation wouldn’t last long, so he set out to grab as many routes
as possible before the curtain came down. Two companies tried to revive
operations using the Braniff name, but both eventually failed.
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