Through the Back Door

U.S. steamship lines have been barred by CAB from operating scheduled airlines to foreign points, though foreign lines can do so. Last week Mobile's aggressive Waterman Steamship Corp. got around CAB. Through its subsidiary, Waterman Airlines, Inc., the steamship company made a deal to get control of TACA Airways, S.A., shaky Central and South American airline system (TIME, Dec. 31, 1945). As TACA is incorporated in Panama, it is beyond CAB's authority. Yet recently, under the reciprocal rights granted foreign lines, TACA was given the right to operate out of Miami and New Orleans on its routes south.

To get control of TACA, Waterman 1) bought half the $1,000,000 worth of convertible notes TACA has issued in a new financing program, 2) got an option on two-thirds of the 18.2% stock interest in TACA owned by T.W.A., plus an option on stock held by other interests. Waterman also got an option on TACA's remaining 290,086 shares of authorized but unissued stock. When it has exercised all its options, Waterman will hold.well over 500,000 shares, better than 25% of the company.

To run TACA, Waterman picked Jack W. Thornburg, 44, vice president and general manager of Waterman Airlines, Inc., who firmly believes that "the speculative, romantic thing" is out of airlines and the era of hardheaded operation in.

A T.W.A. pilot for nine years, Thornburg entered the Navy in 1940, was an operations officer for the Naval Air Transport Service for the Caribbean and South America. When he got out of the Navy in 1946, he joined Waterman Airlines. With six planes -- two DC-4s and four DC-3s -- he has operated a nonscheduled service to Puerto Rico, Central America, England, Germany and South Africa, an intrastate line between six Alabama cities.

Thornburg is well aware that despite TACA's long, colorful career, it can hardly be called a going concern today. In three years it has lost close to $4.5 million; last year's losses alone were approximately $2.6 million and were one of the big reasons that hard-pressed T.W.A. was glad to get out. But by tying the line in with Waterman's steamship operations from Gulf ports, Jack Thornburg thinks that he can get TACA flying high again. And Waterman also hopes to show CAB that steamship companies can operate an efficient, economic sea-air service.

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