Hughes Airwest Corporate Profile 1978

HUI
CORPORATE PROFILE
Hughes Air Corp.
1978
In 1978 . . .
Hughes Airwest is
Making 30 per cent fare discounts available in all U.S.
markets;
Offering- a new Business Coachfour rows of four-
abreast seating on all DC-9sstarting in October.
Installing enclosed overhead storage compartments for
carry-on baggage on all DC-9-30S, replacing open hat
racks;
Boosting the range and payload capabilities of its fleet
through an innovative program of upgrading engines on
DC-9-30S and increasing fuel capacity on 727-200s;
Adding five DC-9-30S and one Boeing 727-200 by years
end;
Pending final government approval, beginning nonstop
flights linking Los Angeles with Calgary and Edmonton and
starting new service to Mexico City and to Milwaukee and
Des Moinesits first new U.S. destinations since 1968.
1977 in Review
Record-setting traffic boosted the airlines revenues at a
faster rate than any other U.S. carriers. It resulted in the
sixth consecutive profitable year.
Cperating revenues totaled nearly $254 million, up 25.7
per cent from 1976. Year-end net profit was a record $9.4
million compared with $3.6 million the previous year. 1977
also was the first time there was an operating profit in
every month.
Passengers neared five million and the miles they flew
(21.3 per cent farther than in 1976) fell short of the fastest
rate of growth in the U.S. by only two tenths of a percent-
age point.
Air freight ton miles grew 18.8 per centfaster than any
other U.S. airlines.
More than 135,000 charter passengers were boarded (53
per cent more) and they were flown more than twice as far.
Its on-time arrival performance was among the top three
in the U.S. and the best of all 19 carriers in the fourth
quarter.
New service linking Crange County and Burbank with
Denver was inaugurated under an interchange agreement
with Frontier Airlinesthe first between two regional car-
riers. Ten cities received new nonstop service: Sookane-Los
Angeles, Salt Lake City-Burbank, San Francisco-Pasco,
Cakland-Phoenix and San Diego-Tucson.
The sixth Mexico resort destinationCabo San Lucas
was added through the new airport at San Jose del Cabo.
Boeing 727s were introduced to scheduled service on
routes linking Alberta with U.S. cities.
The company added five DC-9-30s to its fleet.
Boeing Advanced 727-200s
Geographic Scope
Hughes Airwest serves 55 cities in the western U.S., Mex-
ico and Canada. This is the only three-nation route struc-
ture operated by a U.S. regional airline.
It flies to 47 cities in nine western states (Arizona, Cali-
fornia, Colorado, Idaho, Montana, Nevada, Oregon, Utah
and Washington), or more cities within this territory than
are served by all other airlines combined.
In Mexico, it provides the only U.S. flag carrier service
to six citiesmore than any other U.S. airline.
In Canada, it was the first U.S. flag carrier to serve Ed-
monton and the first U.S. regional airline to fly across the
border. Service was to Calgary.
The north-south span of its systembetween Edmonton
and Guadalajara, Mexicois about 2,500 miles. If extended
in an east-west direction, it would connect San Francisco
and New York. The airline flies to inland areas as far east
as Great Falls, Mont.; Denver, Colo.; and Phoenix, Ariz.
The airlines U.S. service region contains most of the
countrys pleasure destinationsnational parks, monuments
and recreational areas; winter ski centers; summer sun
destinations; and nearly every Pacific Coast beach resort.
Hughes Airwest also flies to most of the largest and fast-
est growing metropolitan centers within this area.

Major
Facilities
The People
Who Make
It Work
Sundance
Fleet
San Francisco International Airport (mailing address)
San Francisco, California 94128
(Area Code 415) 573-4000; TELEX 34-9431
Hughes Airwest industry code: RW
INTERNATIONAL HEADQUARTERS
Its at 3125 Clearview Way at Hillsdale Boulevard in San Mateo
midway between San Francisco and San Jose.
This is the home and operational nerve center for the only sched-
uled airline based in the San Francisco Bay Area.
Around-the-clock flight operations in the western portion of the
North American continent are directed from this facility. It also
houses one of the industrys most modern reservation centers.
Hughes Airwest also is the only airline with a flight attendant
training school in the Bay Area.
MAINTENANCE CENTER
Its at Sky Harbor International Airport in Phoenixthe only such
maintenance and engineering facility in Arizona.
Here, work on the airlines fleet is done by 550 skilled super-
visors, technicians, engineers, avionics and instrument specialists,
supply clerks and support staff.
Expansion of this 152,200-square-foot facility is beginning this
year and is expected to be completed in late 1979, at a cost of
about $8 million. More than 116,500 square feet will be addeda
76 per cent increase. Hangars will be able to handle aircraft as
large as a DC-10 or L-1011.
The Phoenix base is certificated by the Federal Aviation Adminis-
tration to perform repair and service for other airlines on Boeing
727s, DC-9s and F-27s.
The airline has reached beyond the confines of its own operation
by completing contract work on small executive aircraft and
maintenance, technical assistance and training for many foreign
countries.
A work force of nearly 4,600 is employed throughout the system.
It is led by a management team comprised of a board of directors,
officers and 515 management personnel.
More than 600 pilots and 800 flight attendants are based in San
Francisco, Las Vegas, Seattle and Phoenix.
Some 450 telephone sales agents are in Phoenix, Los Angeles,
Seattle and at the airlines International Headquarters.
Six labor unions represent segments of the work force. They are:
Air Line Pilots Association (ALPA); Association of Flight Attendants
(AFA); Air Line Employees Association (ALEAstations, reserva-
tions and clerical personnel); Aircraft Mechanics Fraternal Associ-
ation (AMFAtechnicians and cleaners); International Association
of Machinists and Aerospace Workers (lAMAWsupply clerks); and
Transport Workers Union (TWUflight dispatchers).
A total of 46 aircraft perform nearly 900 arrivals and departures
a day. The fleet consists of*:
Four Boeing Advanced 727-200 trijets (155 passengers)
Twenty-eight DC-9-30 jets (103 passengers)
Ten DC-9-10 and DC-9-15 jets (75 passengers)
Four F-27 propjets (40 passengers)
These numbers reflect the active fleet status as of June 1, 1978.
These are changing due to aircraft sales, deliveries or leasing. (As
of June 1, three DC-9-30S and four 727-200s were on order.)
Published by the Public Relations Department, Hughes Airwest
international Airport, San Francisco, California 94128
Future Among its many route applications pending govern-
Expansion mem appeal are:
Nonstop routes within the airlines system linking
Calgary and Edmonton with Los Angeles and San
Francisco; Los Angeles and San Francisco with Reno;
Oakland with Seattle and Portland; Sacramento with
Seattle and Phoenix; Fresno with Portland; and San
Francisco with Las Vegas.
Authority to five more resort destinations in Mex-
icoMexico City, Acapulco, Manzanillo, Loreto and
Zihuatanejo.
Routes expanding the existing system in several
route cases to Dallas/Ft. Worth, Houston, San Anto-
nio, Minneapolis/St. Paul, Milwaukee, Des Moines,
Denver, Albuquerque, Nashville, Louisville, Cincinnati,
Dayton, Columbus, Indianapolis, St. Louis, Anchorage
and Vancouver.
Based on scheduled and charter boardings in 1977, they are:
Las Vegas 722,784
Phoenix 461,816
Los Angeles 408,446
San Francisco 332,291
Seattle - 323,748
Orange County (Santa Ana) 285,100
Salt Lake City-210,943
Reno - 191,572
Spokane 166,897
Portland 138,866
Boardings at these 10 cities represent 65 per cent of the airlines
systemwide total.
They are in 20 major cities it flies to in the U.S., Mexico and
Canada Boise, Burbank, Calgary, Edmonton, Guadalajara, Las
Vegas, Los Angeles, Oakland, Ontario, Phoenix, Portland, Reno,
Salt Lake City, San Diego, San Francisco, San Jose, Santa Ana,
Seattle, Spokane and Tucson.
City ticket offices are in 14 cities: Anaheim (Disneyland), Ed-
monton. Las Vegas, Reno, Salt Lake City, San Francisco, Seattle,
Sun Valley (seasonal), Guadalajara, Guaymas, La Paz, Mazatlan,
Puerto Vallarta and Cabo San Lucas.
Sales personnel also are in Tokyo; Hong Kong; Sydney; Rio de
Janeiro; San Jose, Costa Rica; London; Frankfurt; Geneva; New
York City; Milwaukee; Honolulu; and Mexico Citycities to which the
airline does not operate scheduled flights.
This multi-nation sales effort is supported by the most advanced
computerized communications systems in the transportation indus-
try. They are called SITA (for Societe Internationale de Telecommu-
nications Aeronautiques) and ARINC (for Aeronautical Radio, Inc.).
Through these two organizations, Hughes Airwest can instantly
communicate and exchange passenger reservation information with
more than 300 airlines around the world.
The assets of Air West, Inc. were purchased in April, 1970 by
Hughes Air Corp., which operates the airline as Hughes Airwest.
The predecessor carrier was formed in 1968 by the merger of
three pioneer airlines in the West: Pacific Air Lines (based in San
Francisco), Bonanza Air Lines (Phoenix) and West Coast Airlines
(Seattle).
Pacific began scheduled passenger service as Southwest Airways
in 1946 and became Pacific Air Lines 10 years later. Bonanza
started as a flight school and charter service at Las Vegas in June,
1945 and operated its first scheduled flights in August, 1946. West
Coast started service in March, 1946; in August, 1952, it purchased
Empire Air Lines, a feeder carrier that was established in April, 1944
under the name Zimmerly Air Transport, later Zimmerly Airlines.
Hughes Air Corp. is a privately held company with the majority
of its stock owned by Summa Corporation, headquartered in Las
Vegas, Nevada. Summa is a diversified firm with interests in hotels,
helicopter manufacturing, real estate and other fields. It was wholly
owned by Howard Hughes, industrialist and aviation pioneer, who
died April 6, 1976.
Hughes Airwest is one of only a few airlines in the world that is
providing technological, managerial and training assistance as well
as consulting services to overseas air transportation companies.
It currently maintains contracts with airlines in Nepal, Mauritania,
Saudi Arabia and Argentina.
It has completed contracts with airlines in Burma, Japan, Liberia
and Ghana.
These countries use Hughes Airwests skills to help them develop
air transportation systems tailored to their particular and varied
needs.
The airline has 60 of its experienced employes and their families
assigned to its programs overseas.
Top 10
Cities
Sales
Offices
A Brief
Look Back
Overseas
Business
Programs

The Major
Expenses
The largest in 1977 was for salaries$86.7 million,
or 18 per cent more than the $73.7 million payroll
in 1976.
The bulk of the companys payroll burden is in
four cities where most management personnel and
pilots and flight attendants are based. Salaries in
each city were: Phoenix, $26.6 million; San Fran-
cisco, $18.4 million; Las Vegas, $13.6 million; and
Seattle, $10.7 million.
The second highest and most rapidly increasing
expense was for aircraft fuel. In 1977, it jumped 36
per cent to $46.3 million from $34 million.
Property and other taxes, plus licenses, increased
33 per cent to $10.8 million from $8.1 million.
Landing costs, fees levied by airports, rose 23 per
cent to $5.8 million from $4.7 million.
The cost of facility rentals and other related ser-
vices jumped 19 per cent to $5.7 million from $4.8
million.
All these dollars were paid to various municipal,
state and federal agencies in the nine western
states, Canada and Mexico.
Financial Results
(Add 000)
1977
1976
1975
1974
1973
1972
1971
1970
Operating revenues
$253,986
$202,162
$169,493
$159,914
$130,107
$96,701
$96,231
$85,204
Operating expenses
238,041
195,489
166,729
147,545
123,823
94,176
98,001
92,245
Operating earnings (loss)
15,945
6,673
2,764
12,369
6,284
2,525
(1,770)
(7,041)
Non-operating earnings (loss)
(3,696)
(1,629)
(336)
(2,324)
(1,437)
(615)
(1,548)
(5,049)
Net earnings (loss) before taxes
12,249
5,044
2,428
10,045
4,847
1,910
(3,318)
(12,090)
Provision for taxes
2,845
1,400
725
2,100
180


(13)
Net earnings (loss)
9,404
3,644
1,703
7,945
4,667
1,910
(3,318)
(12,077)
Performance
1977
1976
1975
1974
1973
1972S
1971
1970
Revenue passenger miles
2,036,763t
1,654,730
1,496,983
1,443,426
1,259,908
891,373
881,890
892,611
Available seat miles
3,758,455t
3,108,909
2,840,686
2,600,620
2,456,863
1,875,100
1,919,294
1,985,701
Load factor (per cent seats filled)
54.2
53.2
52.7
55.5t
51.3
47.5
45.9
45.0
Average density .
(passengers per mile)
51 .Of
47.2
45.9
47.1
41.2
38.8
34.3
31.5
Passenger boardings
4,850,674t
4,038,811
3,700,519
3,662,179
3,365,910
2,557,975
2,731,127
2,898,258
Yield (revenue per
passenger mile in cents)
10.95t
10.77
10.17
9.54
8.62
8.64
8.77
7.87
Average passenger trip miles
420t
410
405
394
374
348
323
308
Average passenger fare
45.97t
44.12
41.12
37.58
32.27
30.11
28.31
24.24
Cargo boarded (tons)
20,8751
18,875
17,941
18,054
17,799
14,750
19,140
19,014
Cargo ton miles
10,2141
8,879
8,464
8,308
7,811
6,012
6,952
6,057
Block hourstotal
133,719t
121,383
115,162
113,799
123,932
94,720
109,452
123,725
Aircraft hourstotal
109,6911
99,990
95,167
93,380
103,201
79,070
91,109
102,556
Revenue departures performed
148,895
139,769
137,574
143,517
157,664
124,348
146,570
163,7711
Revenue block hours
132,1591
119,185
113,370
111,630
121,225
92,222
107,208
121,114
Revenue aircraft hours (airborne)
108,349t
98,049
93,599
91,699
100,836
76,850
89,136
100,273
Revenue ton miles
213,878t
174,334
158,149
152,675
133,737
95,106
95,125
94,917
Available ton miles
469,3581
386,756
352,733
321,681
300,630
229,777
237,625
248,485
Revenue aircraft miles flown
39,929t
35,046
32,594
30,624
30,614
22,989
25,695
28,313
Scheduled aircraft miles
39,996t
35,153
32,736
30,952
30,864
23,104
25,959
28,739
Scheduled aircraft miles completed
39,689t
34,749
32,308
30,307
30,371
22,908
25,602
28,195
Completion percentage
, 99.2t
98.9
98.7
97.9
98.4
99.2t
98.6
98.1
On-time % (within 15 minutes)
80.1
84.8
84.2
77.1
83.7
84.7
85.4t
85.2
*Adcl 000.
tAII-time annual record. Printed in U.S.A.
^Results affected by severely restricted service during a four-month labor dispute that ended in mid-April, 1972. 5/78