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May 14, 1968
Page 76
Aviation DAILY

UAL TO ADD A RECORD 100 JETS TO ITS FLEET THIS YEAR, KECK SAYS

United Air Liens will add 100 jets to its fleet in 1968, more than any commercial carrier has ever placed in service in one year, United's President George E. Keck told the New York Society of Security Analysists last week.
The number of propeller aircraft retired in 1968 will nearly equal the number of jets added, Keck said. And United has accelerated its propcraft phase-out program to achieve all-jet operations in the first quarter rather than the fourth quarter of 1968. Recently, Keck noted, United ordered 30, and took options for 30 more DC-10s with GE turbofan engines, scheduled for delivery in 1971 through 1974.
United introduced the Boeing 737 on April 28, and 43 of the short-haul twin jets will be delivered this year to augment service in the Middle West and industrial East. By late summer, said Keck, 737 service will be extended to Minneapolis/St. Paul and west to Denver. By fall the 737s will enter United's Southern markets and fly east to Boston; and by year-end, they will be serving the Southeast and West Coast.
Keck said the airline industry might have a surplus of capacity in 1968 and added that in United's case this is due to replacement of propcraft with the 90-seat jets. However, he said traffic growth will soon fill any empty seats.
Keck predicted that the decline in airlines' unit costs, which has enabled lower prices to be passed on to customers, is "bottoming out." United's cost per available ton mile will still go down in 1968, but, he said, it is doubtful that the cost per revenue ton mile can be reduced below the 1967 level. Although the factors that produced lower costs thus far in the jet age will continue to operate, the constantly rising price level is catching up.
"We contemplate about a five percent increase in wage rates and a four percent increase in material prices in 1968," said Keck. "For a single year, this is not so alarming, but our ability to absorb increases of such magnitude year after year is reaching the limit.
Promotional fares used in the part two years have depressed passenger yields, Keck said, but the "Discover America" and "Family Plan" fares provided enough new business to more than offset the reduction in fare. Youth and military fares contribute little to profit, but United feels that they contribute long run traffic benefits, he said.
He commented that peak travel periods are being accentuated by pleasure travel, under the support of greater personal incomes and leisure time. "In fact," said Keck, "pleasure travel now is the primary reason why the air travel market is growing faster than the national economy."
Domestic trunkline passenger traffic for 1968 should rise about 15 percent over 1967, Keck predicted, and United's passenger traffic should rise by 23 percent, based on a strong summer peak.

BOEING TO STUDY STOL DESIGNS UNDER AF CONTRACT

The Boeing Co. has been awarded an Air Force contract to study design features of STOL aircraft. The AF is looking toward the development of advanced intraheater transports with potential use as tactical assault, resupply and/or ferry missions, in connection with the Boeing contract. A similar contract was awarded Boeing in February, 1967 for design studies of V/STOL aircraft.

NORTHWEST REQUESTS NEW MILWAUKEE-BOSTON ROUTE

Northwest Airlines has filed with CAB for a new route segment between Milwaukee and Boston, via Buffalo, Rochester and Hartford/Springfield. At the same time, Northwest asked that its application can be consolidated into the proceeding which will consider Mohawk Airlines' application for service between Minneapolis/St. Paul and Buffalo.

SUNBEAM ELECTRONICS, Fort Lauderdale, Fla., will produce main engine power panel instruments for the Boeing747, bringing orders from Boeing to more than $1 million with deliveries over the next three years.
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