Profits Down

First-quarter earnings for the airlines plummeted from 1943's high level. Net profits for United, American, Eastern, TWA--the big four that handle over 80% of all U.S. air traffic--were 38% lower; earnings for many of the smaller companies were down even further.

This meant that despite a phenomenal 90% passenger load, record air express cargoes, and higher gross incomes, the industry was barely hedgehopping over the financial woods. TWA crash-landed in the red, losing $92,420 ($357,352 profit last year). Pennsylvania-Central and Western Air Lines lost $77,682 and $17,565 respectively. American, its net down 47%, still cleared the trees by $597,796. Well-managed United fared best, settling down to a $1,110,083 profit--almost as good as in 1943.

The operators attributed their poor showing to: 1) a 10% cut in passenger fares last July; 2) increased ground costs;

3) bad winter weather that caused a high percentage of flight cancellations (TIME, June 5). In addition, the Army was less generous in allowing operational expenses to be charged to Air Transport Command flights. Result: more administrative expense had to be allocated to, commercial costs, which pushed operating costs per revenue mile up to 95-c- v. 83.6-c- last year. But these factors, some of which the airlines must always reckon with, only pointed up the obstacles they face in reducing their postwar rates. Reductions in fixed costs will be difficult to make, while the public will be hoping for heavily reduced air-travel fares.

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