The Great Airline War
Will IT’s “whiz kids” fizzle?! Will sexy Southwest conquer all?! Will Braniff lose its routes?!
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This story will eventually roll through the muck, so it might as well start out on the high road, with the good things that Harding Lawrence has done for Braniff. Although the modern era of Braniff dates from Lawrence’s arrival in 1965, the airline has been in business since 1930, three years after Thomas Braniff was bitten by the airline bug. Braniff, a businessman in his forties who was getting tired of running an insurance company, bought his own private plane during the excitement following Lindbergh’s voyage over the Atlantic. Braniff soon put his plane to work flying commuter runs (with his brother at the controls) between Oklahoma City and Tulsa. Even after it expanded its operations over a broader network, Braniff was not dealt in on the first big federal subsidy to airlines—the payment for making space available for airmail. Braniff did not begin partaking of this nourishing sustenance until 1934, when—after a series of complaints from Braniff and other have-not carriers and a brief, disastrous fling at having the military fly the mail—the government re-awarded the contracts, cutting a few new lines like Braniff in on the action. Four years later, the carriers that had been getting airmail payments were enshrined in the Civil Aeronautics Act as the existing trunk lines; their position has been unassailable ever since.
Braniff remained under the control of its founder until 1954, when Thomas Braniff, irony of ironies, was killed in an airplane crash. Through the next decade, both ownership and management passed from hand to hand, until the big change of 1965. That year, the three major stockholders sold out to Dallas’ Troy Post, head of the Greatamerica Corporation, for some $60 million. After a search through the ranks of the airlines business, Post recruited Harding Lawrence, then the number-two man at Continental, to come back home to Texas to be the new manager of his airline. Two years later both Braniff and Greatamerica were acquired by Ling-Temco-Vought, then in the headiest years of its conglomerating. In 1970 the Justice Department forced LTV to dump either Braniff or Jones and Laughlin Steel in an antitrust action; since the steel company was then worth twice as much as Branniff, LTV elected to get out of the airline business. Braniff was sold to a widely dispersed group of smaller investors. Through all the shuffling Harding Lawrence remained in control.
Lawrence had gotten into the industry during World War II by helping run a pilot-training school in Terrell, Texas. After the war he started at Pioneer Air Lines and zoomed up the corporate ranks at Continental when it acquired Pioneer. By the time he came to Braniff, the 44-year-old Lawrence was (in the words of the New York Times) “a dark-haired Texan who looks as though an agency had sent him over to play the part of a dynamic airline president.” “Hardly a man alive looks more like the ideal head of an airline than Lawrence,” Stanley Brown wrote in his book Ling. “His wavy hair, silvery at the sides, his careful attention to his modified modish dress (especially notable and colorful at the ranch), and the image his airline projects in its advertising and decor…all conspire to present Braniff’s top manager as a jet-age personality.”
That’s just the part he played, too, on several fronts. The pre-Lawrence Braniff was something of a joke in the industry, its routes small, its performance poor. The most immediately visible of Lawrence’s innovations was the change in the style of the airline—“The End of the Plain Plane,” as the admen put it. Shortly after his arrival, Lawrence turned to a New York advertising agency, Jack Tinker and Partners, to give the airline a little pizzazz. The head of the team assigned to work with Lawrence was one Mary Wells, who helped develop the ideas that made Braniff gaudily famous—the bright colored planes, the Pucci outfits for stewardesses, the retreat from stodginess on all fronts. The following year, Mary Wells and her associates struck out on their own to form a new advertising agency, the now famous Wells, Rich, Greene. The rest, as they say, is history: Harding Lawrence divorced the wife he had married in 1952, he and Mary Wells were married in Paris to the oohs and ahs of the planeload of American friends, and they have lived happily ever after, she working out of New York, he out of Dallas, pieds à terre in each city. “They’re the sweethearts of American business,” wrote Marilyn Bender of the New York Times, “the Mary Pickford and Douglas Fairbanks of the corporate realm.” Bender quoted Wells: “I am stark staring in love with my husband, and he with me.” To avoid all appearances of conflict, Wells, Rich dropped the Braniff account soon after the marriage; for consolation, they picked up TWA, with billings three times as large.
Even after the departure of Wells, Rich, the stylish imprint remains. In many of his annual reports Harding Lawrence talks in astonishing detail about chic innovations—the new hors d’oeuvres called “conchitas,” the “air strip” costumes which his stewardesses peeled off the as the planes headed south, the introduction of drinks like the “Capuccino” (unrecognizable to any Italian), containing coffee, hot chocolate, and brandy.
Beneath the bright colors, Harding Lawrence was doing something even more important: he was making big profits; 1974, the tenth year of Lawrence’s regime, was the richest year in Braniff’s history. Profits were $26.2 million, up thirteen per cent from the year before—which had been a record itself. In 1974, Braniff earned an 18.2 per cent return on equity, a staggering figure for the American business world as a whole and more than twice the average for the rest of the airlines. During Lawrence’s ten years, profits had increased by an average of sixteen per cent, compounded, every single year. As one of the smaller trunk lines, Braniff takes in only four per cent of the industry’s total revenues; but on that money, it makes eleven per cent of the industry’s total profits.
It was the kind of picture that few executives in any industry besides oil could paint in these troubled times—least of all executives in the airlines business. Pan Am lost $82 million last year, and Eastern, whose revenues are three times as large as Braniff’s, made less than half as much profit. (Only Delta, with one of the most favorable route structures in the industry, made proportionately more profit than Braniff in 1974.) The “secret” of Braniff’s success lies with two principles that strike outsiders as obvious, but which have not been widely followed elsewhere. One is to build a network of routes and schedules sensitive to the passenger’s demand—“You go when the passenger wants to go,” says Russell Thayer. The other is to purchase the right kind of airplanes for those routes.
“The most important thing on a passenger’s mind when he chooses an airline is the schedule,” says Thayer, whose own high reputation depends on his having put these principles into effect. “There may be a little bit of loyalty to a certain line or hostility to another, but in general, if you go at five o’clock, and I want to go at five, I’m going to go with you. This means that you have to work back from the schedule, make your whole system start there.”
Braniff has a “radial” route structure, with its center at Dallas, which is harder to coordinate than long cross-country routes like those of TWA, United, or American. “On a system like this,” Thayer says, “the purpose of each connection is to feed the overall network. You try to start flights as far back as possible, so you can build up the traffic for the longer hauls. You start by analyzing traffic out of the smaller stations. Take Austin—as state capital, a lot of good traffic coming out of there. We found that the main long-haul destination from Austin was Washington. The next most important destination was Chicago. You keep that in mind, while you do the same thing with other cities all over the systems. You try to weave them together to make the connections. We’re a high-frequency, short-haul airline, and we pay more attention than other lines do to the most convenient timing of the flights.” Despite Braniff’s reputation as the World’s Largest Unscheduled Airline, it also pays attention to getting the planes to their destination on time; in 1974, it had a better on-time record than most other trunks.
“Once you have the schedule, you look at the equipment and see what’s going to be most effective for the specific market you’re serving.” The Braniff fleet is composed almost entirely of two tested if unromantic workhorses. One is the 727, used for flights inside the United States; the other, the DC-8, for the long hauls to South America. (If and when the Concorde goes on the market, Braniff may buy some for its South American routes, which have all the right qualities for a supersonic flight: long hauls, over water, and full of business travelers who don’t mind paying the higher prices.) Because it has only two basic planes, Braniff doesn’t have to juggle its equipment around; repairs and scheduling also become easier.
There is one other plane in the Braniff fleet—the famous 747. When Harding Lawrence comes close to letting down his guard and speaking from the heart, it is about this plane.
“All the other guys were going a different route than we did,” he says, referring to the 747 orgy a few years back. “They were all buying the wide-body planes, and we were out of step. You heard comments—‘Lawrence has lost his touch.’ A lot of bankers wondered what the hell we were doing.” He lights his cigar and takes a puff. “We figured that it might be a mistake to buy the plane, or it might be a mistake not to buy it. If we were making a mistake by holding back, that would be fairly easy to rectify. But if purchasing it was the mistake, that would be very hard to rectify.” In the twinkle in Lawrence’s eye, one can see visions of poor Continental’s jets, baking in the New Mexico sun.
Lawrence pulls out his scratch pad, and begins drawing a series of parallel lines. “You have your jumbo jet, costing X million dollars, and carrying so many passengers. You find that for the same money you can operate two smaller planes, carry the same load, and have them take off thirty minutes apart. Those thirty minutes may be very important to your customers. One of them wants to go at four-thirty, and the other wants to go at five. You can serve both of them if you stay with the smaller planes.” When Braniff finally did order its one 747, it did so for a tailor-made market. Braniff’s 747 was the one hundredth plane off the Boeing assembly line, but it has already surpassed every other 747 in the world in number of hours flown, profitability, efficiency, and everything else. It is in the air nearly fifteen hours every day of the year.
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