Jetting to a Profit

Some years ago, airlines discovered a new way to bore passengers and lose money besides: they began distributing free in-flight magazines filled largely by predictable articles about the glories of resorts along the airlines' routes. They succeeded neither in interesting readers nor in luring many advertisers. Now, however, the in-flights are changing from expensive throwaways to solid publishing ventures, with a relatively new book, American Airlines' The American Way, jetting into the lead. The American Way is expected to earn $25,000 to $50,000 this year--the first significant profit ever turned by an inflight--after losing as much or more for four years running.

The success is not the work directly of American Airlines but of a father-son team that runs Caldwell Communications Inc., which publishes The American Way. John Caldwell, 55, and John Jr., 29, formed their company in 1967 as an ad agency, and went after the account of American Airlines' air freight division. They lost, but so impressed airline executives that American asked them to publish a projected new magazine. Says John Jr.: "Two guys with advertising backgrounds found themselves in publishing overnight."

The Caldwells saw no reason why an in-flight magazine should not draw enough advertising to earn an eventual profit; airline passengers, after all, tend to be affluent people with sophisticated buying tastes. But they realized that first they had to offer passengers something more interesting than the traditional public-relations puffery. Accordingly, the Caldwells commissioned artists such as Peter Max and Alexander Calder to paint covers and other art work that by now has won more than 30 art awards, and got name authors like James Michener, Pearl Buck and Nathaniel Benchly to write for them. Recent issues have roamed over such diverse topics as American Indian law, city planning, and British Historian Arnold Toynbee's reflections on religion, morality and the world-city.

The American Way began as an adless quarterly, but by early '68, the Caldwells began soliciting ads. They got so many that they were soon able to make the book a monthly. The Caldwells estimate that ad revenue will rise 41% this year, to $1.2 million. Advertisers include not only travel-related companies such as Hertz, Ramada Inns and American Express, but also concerns interested simply in reaching an affluent audience, including Merrill Lynch, Hart Schaffner & Marx and General Motors (for Cadillacs).

Other in-flights also are upgrading their content, and pulling in more ads. TWA Ambassador and United Air Lines' Mainliner are expected to rake in $800,000 each this year, up 29% and 14% , respectively, over 1971 .

As for the Caldwells, they are building an in-flight mini-empire. In 1970, they started Northwest's Passages, making Caldwell Communications the only company publishing two major in-flights. The next step is to get money from readers as well as advertisers. Some issues of The American Way contain order blanks offering a year's subscription at $7.50 to passengers who want it at home.

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