Break in the Weather

To the airlines' mayday pleas for a fare boost, the Civil Aeronautics Board last August gave a majestic, bureaucratic answer. It was already conducting something called the General Passenger Fare Investigation, planned for hearings to go leisurely on until 1959. As they droned on, platoons of economists racked up 5,000 pages of testimony proving that 1) fares are now 9% lower than in 1949, while costs are astronomically higher, 2) the airlines cannot raise money to buy jet fleets. But all this failed to excite CAB. Not a single one of the five board members even bothered to show up at the hearings.

Last week this bureaucratic boondoggling angered the White House, which regards a commercial jet fleet as a transport reserve needed for national defense. It gave CAB a swift kick in the pants, told it, in effect, to give the lines immediate emergency relief. Promptly. CAB offered a 6.6% interim fare boost by a vote of three to two (Vice Chairman Chan Gurney voted against the boost on the ground that it should be 10%). If accepted, as expected, domestic trunklines will get a 4% raise, plus an additional $1 on each ticket, along with the hope that real relief will come later.

Though the interim boost will bring the airlines about $90 million a year more, they still say it is far from enough. In the first eleven months of 1957, net operating income of the twelve lines dropped 49.8% to $56.5 million on total operating revenues of $1.4 billion. In November every line ended in the red except Braniff, and its income was down 55%. Deficits ranged from American's $1.9 million to Northwest's $247,000. The chief cause: while operating revenues rose 12% through November, expenses soared 17.9%. Nearly a year ago, when the airlines first began asking for an increase, they thought 6% would be enough. But CAB delayed so long that now some lines think they need as much as 15%.

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