Allegheny Airlines yesterday joined the list of those seeking authority to fly passengers in and out of Chicago's Midway Airport at cut-rate fares.
In an application filed with the Civil Aeronautics Board yesterday, Chicago Airlines, Inc., a newly-organized, wholly-owned subsidiary of Allegheny, asked permission to fly between Midway and seven cities at fares the carrier's officials said would be 30 to 40 per cent lower than current fares if the application is approved.
Allegheny's proposal is similar to applications filed - and set down for hearing already - by a subsidiary of Southwest Airlines, a Texas-only carrier so far, and Midway Airlines, a recently formed corporation, to provide scheduled low-cost flights between Midway and a total of 14 cities.
Allegheny proposed to fly between Midway and Cincinnati, Cleveland, Detroit, Kansas City, Minnespolis/St. Paul, Pittsburgh and St. Louis at the lower fares. The seven are among the 14 the two other carriers proposed to serve. Of them, Allegheny already serves all but Kansas City and Midway.
"If the Civil Aeronautics Board is going to consider applications of other carriers to serve these markets, we believe that we should participate and provide other alternatives to the CAB," Allegheny President Edwin I. Colodny said yesterday.
Also, yesterday, Allengheny reported preliminary 1976 net earnings of $13.8 million ($1.91 per share fully diluted), compared with a net loss of $9.9 million in 1975. Total operating revenues for 1976 totaled $439.1 million, compared with $377.1 million in 1975.
Included in the 1976 results was $7.7 million resulting from the exchange of a new issues. The balance of $6.1 million was the second highest profit earned by Allengheny in one year from its airline operations, the carrier said.
Fourth-quarter 1976 net earings were $8.8 million (90 cents fully diluted) - $7.7 million of which was produced by the exchange offer - compared to a loss of $1.1 million in 1975's last quarter. Fourth-quarter revenues were $115.6 million, compared with $99.9 million for the same period of 1975.
Asked how the carrier's profitable last year would affect its pending application for a federal subsidy, colodny said, "well, it won't help it." But he contended that subsidy decisions should not be made "on the basis of whether a carrier has a good year or a bad year." Carriers with small-city obligations should not have to supplement service that is not self-sufficient with retained earnings, he said.
Colodny said that in order to provide the low rates to Midway, the Allegheny subsidiary would have to negotiate some different contracts with its employee groups. "We have no agreements at this time," he said, but added that preliminary discussions with pilots, mechanics and attendants indicated that they were "willing" to undertake a review of the carrier's situation.
During 1977, Colodny said, Allegheny will introduce high frequency schedules in less dense and short-haul markets with 28-passenger jetprop aircraft. In establishing its "M-298 Division," which was created for this special service, Allegheny developed special working agreements with its employee groups to permit economic operation in the smaller markets. The M-298 service for the most part with larger, 50-passenger jetprops being phased out by Allegheny.
On other matters, Colodny said Allegheny: Expects an increase of 20 per cent in revenues from charter services in 1977.
Plans to inaugurate jet service to Atlantic City keeps to its plans. Colodny also had some words of praise for CAB chairman John E. Robson, who announced his resignation effective at the end of April. "I think he stimulated the carriers in many areas to rethink their problems," he said.