Air Transport World

TIA stirs up emotions at Transamerica; Transamerica is chasing after lost business with new non-union charter subsidiary Trans International, much to the dismay of its pilots.

There is a cat-and-mouse game being played out in Northern California. Actually, there is one cat--San Francisco-based conglomerate Transamerica Corp.--and several mice. The mice are (1) Transamerica Airlines (TV), the corporation's unionized, mostly charter subsidiary; (2) Trans International Airlines (TIA), the corporation's brand-new, non-union charter subsidiary, and (3) the incumbent carrier's pilots, represented by the Air Line Pilots Association. The latter think TIA was formed to pressure them into concessions at a time when the airline's bottom line is higher than ever.

The story is not new. Texas Air Corp. did it first, when it created New York Air, a non-union airline that operates in a different part of the country from the other TAC airline, Continental. Next came Frontier Holdings, which formed Frontier Horizon as a non-union "feeder" to Frontier Airlines. Now there is TIA, joining the ranks of non-union, sister companies designed to lower total costs and compete more effectively in a world where costs no longer can be easily passed along as fare increases. (Midway Metrolink already was a low-cost producer when it recently took over Air Florida and created Midway Express.)

Prior to deregulation, Transamerica Airlines dominated the charter business. The company also sold itself as the "Cadillac" of charter operators. Its service was pretty reliable, and its fleet was both modern and flexible. It could, and did, perform a variety of tasks, both civilian and military.

Transamerica's mix of business hasn't changed much since the last time ATW looked in on it (ATW, 2/81). In 1983 its breakdown of business segments, as a percentage of the total $253.4 million revenue, was: Commercial passenger charter, 28%; commercial cargo charter, 27%; military passenger, 22%; military cargo, 15%; leasing 10%, and scheduled passenger, 8%. The airline's revenue was 6% of the parent's total and 13% of corporate operating income. …

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