AVIATION: Eagle Hatched

As head of the Army’s Air Transport Command, Lieut. General Harold Lee George organized and ran an airline which was bigger (3,700 planes) than all the rest of the world’s airlines combined. Last week he took a new job: board chairman and president of Peruvian International Airways, which has only five surplus planes, has not yet started operating.

Energetic, 51-year-old Hal George quit the Army, after 29 years, because 1) A.T.C. was falling apart for lack of money and 2) his $14,000 a year as a three-star general was far under his new salary (about $50,000 a year).

Fledgling P.I.A. was the baby of Clement Melville Keys, 70, who has sired many a line. A onetime classics professor, hockey player, and reporter, Keys got into big-time aviation by winning control of Curtiss Aeroplane & Motor Co., Inc., built around it a web of manufacturing and financial companies until he was probably the No. 1 U.S. air operator. In 1932, when he retired from aviation because of his health, Keys was a top executive of Curtiss-Wright Corp., Sperry Gyroscope Co., Inc., T.W.A North American Aviation, Inc., and a director of some ten other aviation companies.

Not long ago James Henry Gundy,* head of the Montreal investment banking house of Wood, Gundy Co., Ltd. wanted to start an airline. Keys suggested a Lima-to-Montreal route, got a charter from the Peruvian Government, and raised $4,000,000 from Americans, Canadians, and Peruvians. P.I.A.’s first route, which it hopes to be operating before March: Lima to Montreal via Panama City, Havana, and New York. This may prove potent competition for Panagra. And if P.I.A. ever makes the obvious extension to Buenos Aires, it will have a New York-to-Buenos Aires route 700 miles shorter than Pan-American Airways’.

U.S. airlines were having trouble all along the line last week. Pan American Airways Corp. was so hard hit by competition that it fired 20% of the employes in its Atlantic Division. Transcontinental & Western Air, Inc., crippled by the recently settled pilots’ strike (see NATIONAL AFFAIRS), postponed all expansion plans, canceled orders for 25 planes. Pennsylvania-Central Airlines Corp. cut its staff some 15%, Western Air Lines, Inc. canceled half its orders for new planes, and Colonial Airlines, Inc. laid off employes. The reasons were plain: passenger travel had slumped, was not coming up to optimistic airline estimates.

* Born on a Monday, but not to be confused with Solomon Grundy.