Superlatives & Shortages

In an otherwise slow-moving stock market last week, the shares of seven of the nation's twelve big airlines climbed to alltime peaks. The high-flying seven: United, TWA, Pan Am, Eastern, Northwest, Continental and Braniff. With air traffic racing 26% ahead of 1965, the industry's first-quarter revenues rose 21%. Last week Pan Am said that its passenger traffic so far this year was up 30%. TWA reported that its revenues in May grew 19.5%, compared with the same month last year. Fast-growing Continental Airlines' May passenger traffic rose 29% on domestic routes and 272% on overseas runs. The line expects to increase last year's revenues by $33 million, to $150 million.

The thrust comes largely from the immensely profitable jet and turboprop aircraft, which now comprise 90% of the scheduled airlines' 2,180-plane fleet. To keep pace with demand, the lines hope to increase capacity by 30% before year's end. They have placed $1.2 billion in orders for new jets this year--and planemakers may have trouble producing them all.

The Pentagon gets preference on the production lines, and heavy military demand has led to a shortage of jet engines for the civilian market. With delivery delays as long as a month, United, Braniff, Delta, and other lines are planning to postpone new services or make do with piston planes. Two weeks ago, Eastern canceled 5% of its flights "temporarily;" Eastern has enough piston planes for those runs--but, oddly, not enough pilots with sufficient piston training. Promising a "round-the-clock" program to familiarize its jet-age crews with the old planes, Eastern said that it would be back on full schedule by July.

Other shortages have arisen with the step-up in military charters for hauling troops and cargo to Southeast Asia. The military pays only about one-third as much per seat as civilians do, but because the lines can count on close-to-capacity loads and greater utilization of planes, the profits on military flights are not much lower than on civilian ones. Biggest military-airlift supplier is Pan Am, which already has 16 of its 100 jets on Viet Nam duty under a $44 million contract. Pan Am has cut its summer-peak transatlantic schedule from 288 to 266 flights a week.

As a result, the record number of Europe-bound travelers may have a hard time getting the flights they want. Passport issuances are running 14% ahead of last year, and advance transatlantic bookings are up 27% at TWA and 29% at Pan Am, with many weekday excursion-fare flights sold out.

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