Word: braniffs
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...Braniffs fall resulted from an overly ambitious expansion program in the late 1970s. The only major U.S. airline still bearing the name of the men who founded it in 1928, Tom and Paul Braniff, the carrier served routes mainly in the Midwest and Latin America until 1965, when Harding L. Lawrence, the flashy executive vice president of Continental, took over as Braniff's boss. In 1967 Lawrence married Mary Wells, chairman of the Wells, Rich, Greene advertising agency in New York City. Wells took on Braniff as an account, and together the Lawrence-Wells team did playful, expensive things...
...ambitious Lawrence sought to use the Airline Deregulation Act, which had just been passed, to expand Braniff aggressively. The airline moved quickly to inaugurate service to a host of new cities. In a single day, December 15, 1978, Braniff began flying 16 new routes and added dozens more after that in the U.S., Europe and Asia. It borrowed millions of dollars to buy 747 jumbo jets to fly the new runs. Passenger loads, however, were nowhere near what was needed to make the new service profitable. On some routes, Braniff was flying as few as eight people...
...about that time, the economy turned down and fuel prices turned up. Braniff went deeper into debt. Its obligations nearly doubled from 1978 to 1979. Losses mounted, ballooning to $131 million in 1980 and $161 million in 1981. In December 1980, Lawrence resigned as Braniffs boss. He was replaced first by John J. Casey, Braniffs vice chairman, and in September by Howard Putnam...
Other airlines moved swiftly last week to take over the airline's more promising routes. American, Continental and Eastern were bidding for the Dallas-London run, on which Braniff had been the only U.S. flag carrier, and the Dallas-Caracas route, a popular one with big-spending, oil-rich passengers...
Investors greeted the Braniff bankruptcy favorably, seeing the end of that airline as meaning more profits for the surviving ones. The air carriers indeed need profits. Four airlines have debts exceeding $1 billion, and most of the big ones lost money on operations during the first three months of this year. While other carriers, including Pan American, Western and Continental, are having serious troubles, none of them appear to be in as bad shape as Braniff was. Stocks of most major airlines were up late in the week...