Air Transport World

Northeastern in the fast lane.

Northeastern in the fast lane

Ft. Lauderdale--Stephen L Quinto has a vision of what an airline should be. He believes it should be an exemplar of capitalism. So far, no surprise. He believes capital is entitled to a fair financial return. Still no suprise. Where Quinto departs from the usual is in his insistance that people, not money, are the main element of any company's capital. Thus, human capital is entitled to at least as much of a financial return as any investor or stockholder when a business prospers. Quinto has the opportunity to but his money where his mouth is, in privately held Northeastern International Airways, of which he is founder, president and predominant stockholder.

At Northeastern he has another opportunity: to take on what he calls "the eastablishment.' As he sees it, the industry, both in the U.S. and abroad, has been largely dominated by a "gentleman's club' which is hostile to real competition and unfriendly to outsiders. In some 15 years in the airline business, Quinto says, he has frequently tangled with this establishment in one way or another, and has the bruises to prove it. Now he has put his mark on a young, fast-growing airline which he believes can not only beat the establishment but also help change its ways. As if to emphasize the point, last month Northeastern appointed airline iconoclast Sir Freddie Laker to its board of directors.

Even more important, he turned the heat corridor by inaugurating unrestricted cut-rate corridor by inaugurating unrestricted cut-rate nonstop service with two Airbus Industrie A300s between JFK and Florida points.

Profit sharing plan

Typical of other recent start-up airlines, two-year-ild Northeastern is a low-cost, non-union operator. The wage structure is lower and simpler than at the older, established airlines--for example, pilots get a flat $50 per hour, regardless of the type of aircraft flown--but profit--sharing, stock purchase and stock option plans have the potential of raising annual incomes to more than respectable levels. The basic scale for cabin crew is $13 per hour, for mechanics $10 per hour, for others $6 per hour. The profit-sharing plan is weighted in favor of the lower-paid employes.

So far there have been no profits, and therefore no profit-sharing.

But, says Quinto, the prospects are excellent that 1984 will end in the black (Northeastern is currently in the process of changing the end of its fiscal year from March 31 to December 31). …

Log in to your account to read this article – and millions more.