Dissonant Instrument

When American Airlines Chairman C. R. Smith began dickering to sell his overseas subsidiary to Pan American Airways Corp., he did not mention it to American's president, Ralph S. Damon. Smith knew what Damon would say. Damon had been the most outspoken critic of Pan Am President Juan Trippe's version of the "chosen instrument" (one "community" line made up of several U.S. airlines) in U.S. international aviation.

Damon had plugged for "regulated competition." Thus, selling American's subsidiary, American Overseas Airlines, would be a step away from Damon's ideas and towards a chosen instrument. So Damon was not told about the deal till it was all set (TIME, Dec. 20). He began feeling, in his own words, like an "ideological schizophrenic." Last week, after 13 years at American, 51-year-old Ralph Damon quit.

Two on the Phone. Then he put in a long-distance call to Howard Hughes, who controls T.W.A., the third of the three U.S. flag lines flying the North Atlantic. Damon had been an admirer of Howard Hughes since he had produced Hell's Angels, but had not met him until 1938 when Hughes was getting ready for his four-day, round-the-world flight. As the dashing, disheveled Hughes puttered around his plane, Damon, like any awed autograph hound, rushed up and introduced himself. They had since become friends. Said Damon: "I am a great admirer of Howard Hughes." Said Hughes: "Mr. Damon's reputation ... is such that any airline would be fortunate to obtain his services."

This week Howard Hughes considered himself fortunate. He picked Damon as T.W.A. president to fill the vacancy left by the resignation of La Motte Cohu last June.

Three on a Route? Damon had a tough job on his hands--and knew it. T.W.A. had lost around $3,000,000 last year and needed something like a miracle man to make it pay off. As a start, Damon planned to spend most of his first year "traveling T.W.A. routes from San Francisco to Bombay, assimilating all the important information" about the line. An unruffled diplomat, Damon also seemed a likely man to get along with eccentric, erratic Howard Hughes.

But first, Damon served notice that as president of T.W.A. he would fight Pan Am's purchase of American Overseas. He scoffed at Smith's explanation that American was selling American Overseas because "the volume of business does not justify the continuation of three competing U.S. carriers on the North Atlantic route." Damon pointed out that none of the three lines lost money on the route last year despite travel restrictions. "Barring an atomic war," said he, "we ought to be able to support more than three carriers as times get more normal."

T.W.A. was planning to intervene in forthcoming CAB hearings on Pan Am's request for approval of the merger. It looked as if Damon and Trippe would battle to a decision, with no holds barred.

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