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From the Archives: The PSA era ended 35 years ago

Thirty-five years ago, on May 29, 1987, USAir Group Inc. completed the $ 400 million acquisition of Pacific Southwest Airlines, the San Diego-based airline that began operations 38 years ago with a leased DC-3 and has grown into one of the country’s largest airlines.

From The Tribune, Friday, May 29, 1987:

The era of Lofty PSA ends with the merger with USAir

By Carl Larsen, Tribune Assistant Financial Editor

Pacific Southwest Airlines – the San Diego-based airline – has quietly merged with USAir Group Inc. today, ending a 38-year history as one of the most innovative independent carriers in the United States.

In the end, the airline that pioneered a few adventures, frequent services and low fares fell victim to its own success.

Other carriers, some of the seeds of airline liberalization, and other industry giants with strong national marketing strategies have finally pushed PSA into the hands of a merger partner, company officials said.

The $ 400 million cash transaction that transferred PSA ownership to USAir was completed in a low tone at a Los Angeles law firm this morning, said Bill Hastings, a spokesman for PSA based in San Diego.

The merger – first announced last December – remained on hold until May 17, when members of the local PSA Teamsters Association gave final approval for changes to the contracts imposed by USAir before the deal was finalized.

Today, the only official announcement of the takeover of USAir was a handshake from USAir and PSA flight crews early this morning at a departure gate at Lindbergh Field.

It was normal then.

Others, however, noted the transition with mixed emotions, realizing that San Diego was losing one of its most prominent public companies.

“It’s a sad day,” said Bill Bailey, an advertising executive whose agency previously operated the PSA account.

“This is an airline you could call really business,” he said. “They did not always take second place, nor did they say ‘Let’s wait and see how someone else does it.’ ”

The record will show that PSA ended its corporate life by surviving two major strikes and a catastrophic 1970s to become a group of heterogeneous activities – operating hotels, rental cars and radio stations.

Ironically, even in its failures, the PSA was a determinant of trends.

Today, the management of Allegis Corp. – United Airlines parent company – is facing a possible takeover, in part as a result of following in the footsteps of PSA more than a decade ago. Allegis owns the Hertz car rental chain and the Westin and Hilton International hotels in addition to United.

PSA also took a financial bath after delivering two Lockheed L-1011 jumbo jets in 1974. The planes, used on the San Francisco-Los Angeles route, were quickly withdrawn as the airline struggled to accommodate the 296 passenger seats.

In its lifetime, PSA also won little of its takeover bid and failed in its own bid to resurrect a bankrupt Braniff Airways through a joint venture agreement.

But throughout its history, there is a day when everyone at PSA wishes they could break the record.

It was September 25, 1978, a day of grief shared by all the people of San Diego.

One clear morning, a Boeing 727 PSA crashed into a Cessna 172 over North Park, killing 144 people in a disaster classified as the worst in the city. Thirty-seven of the victims were PSA employees.

The crash was the PSA’s only fatal accident.

Over the years, PSA has owed its share of the “firsts”, including being the first U.S. carrier to fly the McDonnell Douglas Super 80 and the first major U.S. airline to fly the British Aerospace 146, a small , quiet aircraft suitable for PSA runway routes.

PSA also developed a two-part approach pattern to reduce landing noise at the airline, which is heavily served by the airline, and was the first to use automated ticketing machines.

The company also created the state-of-the-art airline magazine when it helped create the East-West network of former PSA public relations manager Jeff Butler, who is now the nation’s largest in-flight magazine publisher.

But during the year, the only feature of the PSA was the low fares and frequent service on the bread and butter route, the corridor connecting southern California with the bay area.

Today, despite the intrusion of many other airlines into the line, PSA maintains a market share of over 50 percent on the runway.

“If I had to say a word about PSA, it would be personality,” Bailey said.

And he had a personality, although some of the tricks used all these years today seem at best doubtful.

It was PSA that from 1966 to 1976 dressed its flight attendants in hot pants and miniskirts, prompting some East Coast customers, Bailey said, to demand that they fly to “this sexy airline outside the West”.

“Our team had a California mentality,” said Jodi Bras, a flight attendant with the 1965 airline.

“PSA’s corporate image has always been to use colors that no one else has used. “They were never receptive to red, white and blue,” he said.

“For the most part, the aviation industry looked at it with raised eyebrows, thinking it would start a trend,” he said.

As for the miniskirts, Bras said: “Everyone was wondering how close they could get.”

There were also “lucky seat” gifts and occasional “comedy” routines by pilots and crew that survive to this day. (“Ladies and gentlemen, now we stop at the gate.”)

But when miniskirts went out of fashion, PSA found itself needing to do a little growing up.

“As they got older, they had to do it,” Bailey said. I was instructed to keep having fun with the creative (ads), but they also told me “Do not lose sight of the fact that we have now become professional”. ”

Present at the creation of the PSA was Eleanor Fulmer, who signed on as a ground instructor at a flight school run by the late Kenneth Friedkin, one of the airline’s founders.

When the flight school was founded, the idea of ​​an airline connecting California’s coastal cities came to fruition, and investors lined up to begin work in May 1949 with a hired DC-3 flying between San Diego and Auckland via Burbank.

“There was a market,” said Fulmer, PSA’s first registered employee and one of the first female executives of an American airline. “They called the airline ‘poor sailors,'” he said. “We threw them on the shore during the Korean War.

“We have reduced air travel to those who could not afford it,” said Fulmer, who in 1963 was instrumental in making the PSA public.

He retired in 1982 as treasurer of the airline.

Until 1978, PSA was strictly a California carrier. That year, the Civil Aviation Council gave the airline the power to serve Las Vegas and Reno, creating an extension that has since moved the PSA east to Colorado and the Pacific Northwest.

Cecil Scaglione, a former airline public relations man and former airline journalist, said working at PSA gave “a real family feeling”.

“Everyone knew everyone else. “It was a fun place to work,” said Scaglione, now a marketing communications executive.

“I worked there when the deregulation approached,” he said. “The airline has expanded and the business has changed, and it has been exciting to participate in this change.”

While the 5,600 PSA employees today marked the end of their “airline”, travelers should not see a significant difference in the near future, said David Shipley, a spokesman for USAir based in Arlington, Va.

“PSA will be a wholly owned subsidiary until about the first of the year, when it will be incorporated into USAir,” Shipley said.

For now, the colors on the PSA’s 55 aircraft fleet – and the trademark smile on their noses – will remain in place.

But the shift to functions has already begun.

USAir, Shipley said, has integrated PSA programs into its booking computers and has begun training some PSA ground staff on the procedures used by USAir.

The inclusion of flight crews, however, will not take place until next year.

PSA shareholders, Shipley said, will begin receiving letters instructing them to repurchase their shares for a fee of $ 17 per share.

PSA’s holding company, PS Group Inc., will pull out of the deal for about $ 280 million.

In addition to public investors, PSA employees will also benefit from the sale, who have exchanged payroll contracts and concessions under working rules for an airline ownership position.

The PS Group, which will deal with oil exploration, aircraft leasing and fuel service, will eventually open downtown offices with about 15 employees under President Paul C. Barkley, who was president of Pacific Southwest Airlines. .

Until then, Barkley and PS Group staff will continue to work at PSA headquarters on Harbor Drive.

As for the other PSA executives, Shipley said: “They still have an airline running for a while.”

President Russell Ray will continue to work for the airline, spokeswoman Margery Craig said.

While USAir has said it expects not to cite layoffs as a result of the merger, the long-term employment prospects for PSA’s administrative staff remain uncertain.

Eventually, USAir is expected to relocate its supervisory functions to its headquarters in Virginia.

“An airline does not need two accounting departments,” one observer noted.

While many aspects of the future of PSA under USAir have not yet been decided, PSA employees are making a special request to the new owner.

On PSA planes, some crew members today wear “SOS” buttons – not in danger – but for “Save Our Smiles”.

“I hope they do not lose their smile,” Fulmer said.

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From the Archives: The PSA era ended 35 years ago Source link From the Archives: The PSA era ended 35 years ago

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