Amazin'-Dixon Line

Most of the nation's twelve major airlines are just beginning to pull out of the steepest nosedive in the industry's recent history, but one carrier has been cruising above the clouds all along. Delta Airlines earned $41 million last year and is doing almost as well so far in 1971.*

Compared with many larger airlines, which have a patina of sophistication, Delta comes off as an unpretentious country cousin. Instead of advertisements and commercials featuring aircraft silhouetted against flaming sunsets or sonorous "Wings of Man" pitches, Delta serves up pedestrian slogans like "The airline run by professionals" and the only slightly more inspired "Delta is ready when you are." Instead of grasping only for the glamour routes, Delta, the offspring of a crop-dusting outfit, has patiently mined the minor metropolises of the South for 42 years. It has eleven flights a day, for example, between Atlanta and Augusta, Ga. The airline's success has paralleled the rapid growth of the South. Atlanta's Hartsfield Airport has become the third busiest commercial airport in the world--after Chicago's O'Hare and the Los Angeles International Airport--and much of the traffic belongs to Delta.

Now Delta is looking north. It recently agreed to merge with troubled Northeast Airlines and is awaiting word from the Civil Aeronautics Board, which industry insiders believe will grant approval. At first glance, the advantage to Delta of such a merger is not entirely obvious. Northeast is as weak as Delta is strong. The Boston-based airline has had only one moneymaking year in the past 15, and has been serving barely half the New England and Middle Atlantic cities for which it is certified. Citizens of some of those towns regard Northeast's presence as a mixed blessing at best and often complain about poor service. While Delta is endowed with both short feeder routes and long trunk routes that hook up with them, Northeast is weighed down with a collection of feeder runs that force passengers to take competitors' connecting flights. Therein lies one of the attractions for Delta. When the two route structures are merged, passengers from small northeastern towns such as Presque Isle, Me., and Burlington, Vt., will be able to fly Delta all the way to the sunny reaches of the South.

Northeast also has a buried treasure of other routes that it never had the money to exploit fully. They stretch from Montreal, Boston, Philadelphia and Washington to Miami. The most important prize that the merger will bring, according to Delta Chairman Charles H. Dolson, is Northeast's right to fly the heavily traveled New York-Miami route. "Now," he says, "we can compete with Eastern."

Inheriting Problems. In addition to this bonanza, Delta will inherit some problems. It must assume a $40 million accrued debt from Northeast and continue to maintain the perennially profitless New England routes. "We can't do any better with the local service than Northeast did," Dolson admits. "Even a genius can't make money flying jets 100 miles at a time."

Dolson has come closer than most. With the help of his ever-present slide rule, the 65-year-old former Navy pilot has achieved for Delta the highest return on post-tax revenue (10%) and one of the lowest break-even points on an average flight (42.5% occupancy) among the major airlines. And Delta has done it despite having the shortest average flight length of any major airline (416.5 miles). The secret of Delta's efficiency is a tight timetable. The airline's DC-8s routinely roll up 5,400 miles a day in short, closely scheduled flights; its aircraft utilization rate is the highest in the business.

Fired-Up Family. This scheduling success is based on another quality in which Delta abounds: team spirit. It is not unheard of for ground mechanics to pitch in to help load baggage during peak hours, or for pilots to make voluntary sales calls on Atlanta executives to solicit business. One typically fired-up employee recently wrote in the company magazine: "As a member of our Delta family, how can we, each and every one of us, help to make our Delta stronger, more needed and an airline that gives services which cannot be bought?"

One way they are helping is by spurning union organizers; Delta is the only major airline without a majority of unionized employees and likely will remain so even after absorbing unionized Northeast. That distinction allows Delta greater operational flexibility and higher profits. What keeps the unions out? In addition to the fact that pay scales are on a par with those of other airlines, says President Thomas Beebe, Delta's employees work in "an environment of trust, confidence and approval."

* Only Northwest earned more last year ($44 million), but that line has lost $12 million so far in 1971 because of high start-up costs following a clerk's strike.

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