Straighten Thinking, Period

Distress signals flared on U.S. airlines. After a brief spell of profit-making in June, the domestic airlines had nose-dived into red ink in July, normally a peak season. For lack of business, American Airlines, the nation's biggest domestic line, had laid off 78 mechanics, lost $5,000,000 in 1948's first half. Only Eddie Rickenbacker's Eastern Air Lines was still making money. Last week Rickenbacker reported a six months' net of $1,321,065, up slightly ($3,000) from the 1947 period.*

Although Rickenbacker's Eastern was doing all right, he was worried about the industry: "If the airlines can't make money in the greatest period of prosperity the country has ever seen," he asked, "what will happen to them if there's a slump?" Prodded by the same worry, President Truman summoned RFC and CAB chieftains to the White House to find how to keep the airlines going. CAB had already called an industry-wide conference for this week to seek the answers, and no voice there would carry greater weight than Eddie Rickenbacker's solemn, Midwestern drawl.

Rosy Dream. What is the touchstone of Rickenbacker's success? Said he last week: "Work harder and think straighter. Period."

Rick held Eastern to modest expansion in planes and staff when, in a rosy postwar dream, the rest of the industry overbought and overstaffed, and CAB over-chartered new routes and lines. At 57, he still drives himself as hard as any of his 8,000 employees. He watches every operation of the line with miserly detail ("I count the pennies," he says, "and then I count the mills"). His men constantly feel his breath on their necks, and periodically (at the "strategy meetings" where he calls most of them together for grueling day & night sessions) they also feel him nip their heels.

Rotten Apples. Rickenbacker thinks he knows what is wrong with the industry: too many carriers, too low fares, too many deadhead services (e.g., free meals). Just charging for meals, he says, would add $15 million to the industry's revenues, almost enough to wipe out 1947's losses ($20 million).

Alone among carriers, he argues, the airlines are getting less revenue per passenger mile than prewar. He favors a 10% boost, and letting CAB skin the cut-rate "wildcats" (TIME, Aug. 16). As for the excess of carriers, he would have CAB face the fact that it chartered too many, and up to now has penalized the efficient ones by throwing the heaviest subsidies to the failures.

Rickenbacker is well aware of Eastern's own stake in the industry's general health. Said he soberly: "You can't go on forever being the only sound apple in the barrel. Pretty soon you get speckles."

*Among international carriers, mammoth Pan American was the exception. Last week, Pan Am felt chipper enough to slash round-trip transatlantic fares by 25%. Its money-losing competitors dourly prepared to follow suit.

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