Air Transport World

Braniff changes strategy.

Dallas/Ft. Worth--The honeymoon is over for Braniff, Inc. and its new owners. The question now on everyone's lips is how long the marriage will last.

During a mid-August visit, employes were still working their hearts out. But that was before a wholesale marketing change in early September that shifted Braniff from a business-oriented airline to one offering discount faires. The 25% reduction in staff that accompanied the fare change was bound to have a depressing effect on remaining employes.

Moreover, after five-and-a-half months of losses (at least $70.5 million), many inside and outside the company wondered how long the owners, Chicago's Prtizker family, would back Braniff's return. Analysts cite the Pritzkers' pride as a reason for their not quitting too soon. Others figure the Chicagoans, even with their tax loss carry-forwards from the old Braniff, can use only so many losses to throw off against other, profitable investments.

When the Pritzkers committed themselves to resurrecting Braniff, many questioned the wisdom of challenging American and Delta at DFW (ATW, 10/83). Still, the family members are savvy investors, as well as being successful at running a quality service corporation, the Hyatt hotel chain. The estimated $360 million worth of tax benefits are attractive to any profitable investment concern. But the Pritzkers certainly did not want to absorb too much more in additional losses. As an industry official said, "There are a lot more attractive tax shelters out there than the airline business."

No one is under the illusion that the supply of funds is unlimited. President William D. Slattery said in March that the company would be able to tell "by summer" exactly what its prospects would be. As Braniff neared the end of the summer travel season everyone realized that if the company is to survive, it will take more patience and money than was anticipated. Slattery himself was under the gun, and reportedly on his way out. One of the three Braniff officers he brought with him from TWA had left, to be replaced in the field of customer service by a former local Teamsters official, Marvin Schlinke, whose last full-time job at Braniff was as a customer service agent. …

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