Foundation Forum

Mr. Jeffrey Erickson
President and CEO
Trans World Airlines
The Civil Air Carrier Perspective
Mid-America Symposium
St. Louis
May 3, 1996

I am honored to be here and thank you for the kind invitation to address this symposium. On behalf of our 23,000 employee owners of Trans World Airlines, let me say it is an honor to address you and serve as executive advisor and also to welcome you to our hometown of St. Louis, where we have quite a large operation. Some of this talk about videotele-conferencing is pretty scary. I hope there still are some people who want to get from "Point A" to "Point B" on a commercial airline. This future is very scary, but we ve been going through some of that at TWA by taking 70 years of corporate culture and trying to change for the future. It is difficult to manage change and learn from what other organizations are doing and how they manage the change.

I want to talk about the civil side of aviation and touch on history as opposed to the scary future. Our airline, TWA, is an airline with a long and glorious history. There has also been a partnership that has evolved over the years between the U.S. commercial airline industry and American military air transport. It has been a wonderful partnership for both partners. Finally, I d like to spend a few minutes responding to questions.

First, let s revisit some history. TWA s history of service with the U.S. Armed Forces extends back to the beginning of military aviation. The TWA story and the story of military air transportation has been intertwined closely for more than 60 years and our company is very proud to have played a significant role in the development of some of the most significant aircraft in military air transport history. In 1933, for example, TWA s vice president, Jack Fry, decided that our airline needed a new airliner, an airliner that would provide a quantum improvement in performance and customer service over the Tri-motors and similar aircraft then in use. Fry sent out a challenging list of specifications for this so-called "Airliner of the Future." The Douglas aircraft company accepted Fry s challenge. The result of which was the DC-1 prototype soon followed by the production model DC-2. The DC-2 became the mainstay of our fleet at TWA. Its next generation successor, the DC-3 went on to a glorious military career as the C-47. To this day, most authorities on air transport consider the DC-3/C-47 combination to be the most important aircraft every built, and it all began in a letter to Douglas aircraft from TWA.

But the C-47 was not the only workhorse of World War II that traced its roots to the TWA fleet. Just before the war, TWA made another breakthrough in commercial aviation with the Boeing 307 Stratoliner. That airliner joined the TWA fleet in 1940 as a replacement for the DC-3 and was the first four engine, pressurized airliner. Only 11 years after offering the first transcontinental air and rail service, TWA could now offer its customers flights over the weather in unsurpassed comfort and luxury.

The 33 passenger, very large at that time, Stratoliner s career in airline service was cut short by the war. However, much of the 307 s design, including the wing, the power plant and the tail assembly, flew on to glory as components of the Boeing B-17 bomber.

I am sure everyone in this room knows and admires the Lockheed Constellation, TWA s signature aircraft from the 1940s until the 1960s. The "Connie," as it was affectionately called, was the aircraft that launched TWA into the international airline business in 1946. We are now celebrating our 50th anniversary of our start of transatlantic service to 6 cities in Europe and the Middle East. It started then when the first Cnstellation, the Star of Paradise, made its maiden flight from New York to France.

However, the first Connies originally were delivered to TWA in 1943. Jack Fry, whom by that time was TWA s president and TWA s owner, Howard Hughes, set a 6 hour and 44 minute transcontinental speed record in a Connie in 1944. But as soon as it was ready to fly, TWA turned the Connie s over to the Army for wartime transport service. So TWA s customers had to wait several years for their first trip on them. But TWA crews did not wait because they were very busy flying wartime missions in government service. In fact, during World War II, TWA planes and crews flew more than 10,000 international missions for the Armed Forces.

That was a valiant public service by the people of TWA, and it also was great training for the post-war boom in trans-Atlantic flying. When peace returned, the people of TWA were already seasoned veterans of trans-Atlantic flying, even though we were yet to fly our first commercial transatlantic flight. TWA s wartime experience and the post-war boom in commercial aviation that followed illustrates the unique American partnership between military air transport and commercial aviation, a partnership that has been uniquely beneficial to both sides. In almost every other nation, commercial aviation has developed as an arm of the state. For many years, the largest and most prestigious non-U.S. airlines British Airways, Air France, Lufthansa, and Quantas to name just a few were state-owned and controlled. They typically enjoyed a de facto monopoly status as the flag carrier serving their respective nations. Not so here in the United States.

In our country, even in the days of total government regulation of the domestic route system, the official policy has always been to encourage the development of many competing airlines. The government made a few early attempts at direct involvement in civilian air transport, most notably the disastrous attempt by the Army to take over air mail delivery in the 1930s.

Policy makers quickly realized that the private sector was far better equipped to develop the commercial airline business. The airlines in turn fully realized and accepted their role as citizen-soldiers ready and willing to do their duty at times of national need. As a result of these policies, a couple of very good things happened.

First of all, the development of the world s premiere domestic airline system became not only a matter of commercial interest for the airlines, but a matter of national interest for all Americans. The government saw that the development of commercial aviation was vital both to peacetime prosperity as well as to national defense. In other countries the government became the master of commercial aviation. In the U.S., the government became a very strong partner.

The second thing that happened was exactly what you would expect to happen when you give strong competitors room to run. The U.S. airline industry quickly outran the world.

Today, the wisdom of these policies is self-evident. In an era when the U.S. has lost its leadership to foreign competition in some industries, we remain clearly dominant in at least two: airlines and aerospace manufacturing. Most of the jet airliners in the world are made in the U.S. Those that aren t, generally have more than half of their components manufactured here. Most of the commercial airline miles are flown by U.S. air carriers. Our airliners are the most competitive and most efficient on the planet. Our airline passengers benefit from the best fares and most convenient schedules.

Moreover, as always, we stand ready to serve. In times of crisis, the U.S. Air Force can call on the strongest and most capable commercial aviation fleet in the world. TWA and our colleagues are ready to answer the call and to answer it better than anyone else. We are proud of our role as partners with the Air Force in military air transport and we look forward to continuing this relationship long into the future.

We appreciate your support. I appreciate your support. And w appreciate very much your business. Thank you and I would be happy to entertain your questions, if you have any.

GEN. SHAUD: Jeff, thank you very much. Many of you know an awful lot about logistics and particularly the role of logistics during the Gulf War. Jeff, has the actual experience of our civil air carriers and the Civil Reserve Air Fleet during the Gulf War positively or negatively influenced your attitudes today?

MR. ERICKSON: I see real advantages to the participation. Some people can draw on some of the negatives if they want to. Obviously, you don t like losing airplanes or people, be it for missions or Reserve requirements. We tend to look at it as a positive experience. A great many of our pilots traditionally come from the military side even though we may see the civilian side kicking in a little bit more now.

Through this cooperation and through talking to folks at Mobility Command, we have learned how much we do a lot of the same things. The presentations earlier today point out some of the same things we fight with in terms of communications. This partnership is something that I very much favor. It has been good specifically for TWA. It is good for the commercial industry.

GEN. SHAUD: Thank you for your remarks. It has been a good reminder that America is the world leader with regard to our transportation systems, and we wish you the best in continuing this important role.

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