How to Make Ten from Three

"One and one and one don't make three in this case--they may well add up to ten." So says G. Robert Henry, 51, president of Pacific Air Lines. Henry's arithmetic stems from the profits he anticipates from a merger of Pacific and two other regional, or feeder, airlines: Phoenix's Bonanza and Seattle's West Coast. The system, after approval by stockholders and the CAB, will cover eight Western states.

Henry's trio aims to get out of the barely black and into the wider blue. The merged lines promise to pare expenses by cutting out competing ticket offices in some 25 cities and by ending route duplications. By building up their fleets, which now include Fairchild F-27 turboprops and Douglas DC-9 short-haul jets, they hope for rich runs to Hawaii and to Mexican resorts.

Bonanza is the strongest of the three. Flying popular routes in California, Nevada, Arizona and Utah, it retired its last piston plane in 1960, has attracted passengers with imaginative fare plans. Last year passenger totals rose 26.8%, to 848,000, and the company earned $530,000 on revenues of $18 million. Much credit goes to Henry who, before going to Pacific last July, had been second-in-command to Founder-Presdent Edmund Converse, 60. Converse will be vice chairman of the merged airline, and Henry its president.

Perilous Pitch. West Coast, operating primarily in the Northwest, earned a handsome $836,000 on revenues of $18 million last year despite a number of low-profit, short-hop routes and a 20-plane fleet burdened by eight aging DC-3s. One of its biggest assets is its president and 30% owner, Nick Bez, 72, long a kingpin of the Democratic Party in Washington State. Bez will be chairman of the new line.

Last and least by a considerable margin is Pacific. The company's profits dived to $150,000 last year from 1965's $700,000, largely because its five Boeing 727s turned out to be uneconomical for Pacific's short routes. Two of the jets were leased to National Airlines. Then, Pacific turned to Humorist Stan Freberg for a promotion campaign that spoofed the perils of flight (said the stewardesses after landing: "We made it! How about that?"). That macabre pitch (TIME, May 12) did not keep Pacific from going deep in the red this year, and in July, Henry was called to the rescue.

The merger must be cleared by the Civil Aeronautics Board. That should be a snap. The CAB has long been anxious to dump the heavy Government subsidies ($54 million this year) needed to keep the feeders in the air. Henry & Co. promise to take an immediate 10% cut in their total $10 million a year handout, and expect to be carrying the full load in three to five years.

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