• U.S.

Business: Down with the Swoose

3 minute read

To established U.S. airlines, North American Airlines is neither swan nor goose but an unloved and awkward swoose. Technically a nonscheduled operator under CAB rules calling for “irregular” and “infrequent” flights, it has nevertheless grown into a $9,000,000 outfit operating one of the biggest transcontinental air-coach services. Last week, with North American’s 1954 sales topping $11 million, the CAB decided to clip the big hybrid’s wings. A CAB examiner recommended that North American be grounded for operating a scheduled airline in violation of CAB regulations.

Battles & Coaches. The trouble was nothing new for North American’s four Los Angeles co-owners—Stanley Weiss, 43, James Fischgrund, 39, Ross R. Hart, 40, and Jack B. Lewin, 42. Separately and together, they have been fighting CAB for years. Returning from the war, Fischgrund, a Navy lieutenant commander, and Weiss, an ex-Air Corps transport pilot, bought two war-surplus Douglas C-47 transports for $15,000 down, and formed Standard Airlines. Hart and Lewin. two Douglas Aircraft employees, formed their own Viking Airlines with the money raised from 29 coworkers. The two lines pioneered cut-rate air-coach flights. By 1948 they had 80% of the transcontinental air-coach business sewed up between them.

This was too successful both for CAB and the big scheduled airlines. Charging that the lines flew too regularly and too often, CAB put them out of business. The four-man team of flyers promptly organized North American as a series of interlocking companies to get around the rules.

First they formed Republic Air Coach System to handle the financial end, then bought up four small nonscheduled lines with valid CAB letters of registration—Twentieth Century Air Lines. Trans National Airlines, Trans American Airways, Hemisphere Air Transport—to supply planes and pilots.

North American itself, though its name is on all planes, acted merely as a ticket agency. With that setup, Fischgrund, Weiss & Co. started maneuvering their four “flying companies” to operate what amounted to a regular scheduled airline.

Though no one company ever flew at the same time each day, the four combined could put together a solid, round-the-clock schedule by jockeying their flights back and forth.

“Perfect Safety.” The CAB took out after North American almost as soon as it started. But by one legal dodge after another, the line has managed to keep going. And it has turned into a whopping success. It started the first $99 fare coast to coast, expanded its air-coach business so fast that it forced the scheduled lines to start air-coach flights (today 34% of all airline travel is by air coach). North American made enough money to buy two Douglas DC-6Bs for nonstop transcontinental flights, has three more on order, and has been able to chop its coast-to-coast fare to $75 one way. The line can also boast proudly in its ads that it has flown “1 billion passenger-miles without an accident—A perfect safety record.” North American, which will keep on flying while it files an appeal before the full board, makes no bones about its determination to force its way into the exclusive circle of scheduled airlines. The line argues that CAB doctrine since the board was first set up in 1938 has been to limit the number of trunk airlines to the 16 “grandfather” lines (American. Eastern, United, T.W.A., etc.) operating at that time. Since then, three have dropped out, but no new names have been added to the roster, though 27 small feeder services have been authorized. Instead of expanding existing airlines to fill all U.S. needs, North American wants the CAB to let it provide new service and competition.

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