Hope-Lined Clouds

For U.S. airlines, the question in 1947 was not how good, but how bad, was business. Last week, as its annual reports came in, the industry added up the answer: the 16 scheduled domestic airlines had lost more than $20,000,000.

Hardest hit was United Air Lines, Inc., which had a $1,086,961 profit in 1946. The rise in costs, poor weather early in the year, and the grounding of all the new DC-6s swelled United's loss to $3,747,000. American Airlines, Inc., biggest domestic carrier, was also nipped by the grounding. Though its traffic (some 1.4 billion passenger miles) and gross revenues (nearly $82 million) were the highest in company history, its losses soared to $2,962,776 (from $375,943 in 1946).

Only one major domestic line, Eastern Air Lines, Inc., showed a profit; but its net of $1,259,196 was only one-quarter of the year before. Pan American Airways Corp., partly because of currency restrictions (for which it had to put aside a "very substantial reserve"), turned in a profit of $2,960,000, slightly below 1946, despite a big expansion in operations.

Only Transcontinental & Western Air, Inc. showed any improvement. There was plenty of room for it. T.W.A. reported a 1947 loss of $8,079,760, as compared with a 1946 loss of $14,353,237.

Nevertheless, most of the airlines were hopeful. Some of them expected retroactive boosts in mail rates which would help considerably. And much of last year's expense was for expansion that had yet to pay off.

For example, Northwest Airlines, Inc., which lost $1,141,340, had put a lot into developing its short route via Alaska to Japan, expected a big boost in traffic soon. Colonial Airlines, Inc. attributed much of its deficit ($1,074,341) to "developmental expenses" on its new Bermuda run. American Airlines spent $30,926,000 for new flight equipment, will have replaced all of its fleet of older planes with more efficient craft by year's end.

American's President Ralph S. Damon predicted that such developments would mean an improvement in earnings for the entire industry this year. Eastern's President Eddie Rickenbacker thought that the industry had already hit bottom, "and would be out of the red by fall."

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