Air Transport World

Newly cautious World Airways searches for profitability.

Newly cautious World Airways searches for profitability

Someone once said that being in the airline business is like being in a crapshoot, so it seems somehow fitting for an airline to have gotten its start on the winnings from a poker game. World Airways, the Oakland-based, born-again nonsked, came into existence in 1950 when a young gambler, Edward J. Daly, used $50,000 in poker winnings to buy the World name and two tired C-46s from a defunct New Jersey operator.

Daly, whose dream was to bring low-cost air transportation to the masses, ran his airline for more than 30 years in a flamboyant, toss-of-the-dice manner, taking it from a lucrative charter business into the highly competitive world of scheduled service.

But times have changed and so has World Airways, which left the scheduled arena in September after struggling unsuccessfully for seven years to compete against the major airlines in a deregulated environment. Its goals have changed and so has its look--a new logo has been designed to give the airplanes and the company a cleaner, more modern appearance and to cut costs.

More significantly, the makeup of the management and even the atmosphere in the executive suite have changed. Long dominated by the colorful presence of Daly, who ran a one-man show almost until his death in 1984, the "top floor' now looks like a bastion of conservatism and its tight, young management team is headed by a 32-year-old Stanford MBA graduate.

Pare down and clean up

The byword around World these days is "caution' as the airline steps gingerly out of what became increasingly unprofitable and unwieldy scheduled service and back into the arenas that produced a profit for most of its life: contract flying and third-party maintenance. The new strategy is to pare down, clean up and "control operations profitably throughout the system,' says president and chief executive officer T. Coleman Andrews. The new CEO, who joined World on Aug. 25 to engineer a turnaround, is quietly projecting a "smooth transition from one business to another' and a "modest profit by 1987.'

From its inception until 1979, World rode high on the winds of competition, managing with its low cost structure to turn consistent profits on commercial and military charters and supplementing that business with maintenance and aircraft leasing. The airline became a dominant factor in nonscheduled service, and Daly became known as a humanitarian through his efforts in airlifting war orphans and other refugees. Even so, World's founder fought for many years--long before People Express was a glimmer in anyone's eye--to be allowed to establish low-fare, scheduled, transcontinental service between "remote' destinations. …

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