Eastern Airlines reported first-quarter earnings of $13.2 million (48 cents a share) today, down from last year's record $19.5 million (92 cents).
At the company's annual meeting here, Eastern Chairman and President Frank Borman attributed the earnings decline to harsh winter weather and rapidly rising costs for jet fuel.
But he told his stockholders "the best March in 15 years" followed the severe storms of February and that April has been even better-with the carrier filling 74 percent of its seats, partially the result of traffic gained because of the United Airlines machinst strike.
"We look forward to a good year in 1979," Borman predicted, but he added, "We continue to have our work cut our for us" as they pick up from the "financial wilderness of 1975."
Much of the relatively short and uneventful meeting was taken up with Borman's explanation and defense of Eastern's attempt to take over National Airlines. "A national acquisition offers 55 airplanes at a fraction of their market replacement value," Borman said. He noted that Eastern now has orders and options for 26 airplanes for $370 million. For $55 million more, if Eastern is successful with its merger bid, it would gain National's 55 planes, not to mention National's overseas routes. "It remains an outstanding opportunity," he contended. He discounted the anticompetitive effects of a merger between the two Miami-based carriers, arguing that National has pulled out of many of the cities they both served and repeating his theme that the airline deregulation law had drastically altered the airline business.
A One-time foe of deregulation, Borman conceded that he now believes it is better for Eastern for its management to have the ability to deploy its resources rather than have decisions dictated in Washington. "I think the industry and American society will be served over the long run by a deregulated environment," he said.
On other topics, Borman:
Said Eastern looked at the possibility of buying a refinery or a small oil company to assure a supply of fuel at reasonable prices but abandoned the idea in light of the need of capital for new equipment (a fuel-saving program at Eastern has enabled the company to carry 44 percent more passengers on 3 percent more fuel since 1973, Bornan said, but added that Eastern had done all the squeezing it can do.)
Told complaining stockholders that he would be happy as they would when the company could resume paying dividends on common stock-not done since 1969-but said capital requirements precluded that right now. However, Eastern's lenders have removed their provision in loan agreements barring the payment of dividends be noted.
In its report on the first quarter, Eastern said operating revenues were a record $661.7 million, up 13.2 percent from $584.4 million in the first three months of last year. Operating expenses rose 15 percent to $637.6 million from $554.6 million.
Meanwhile in Miami, National Airlines, object of merger attempts by three other carriers, announced netincome of $10.5 million (1.24 a share) for the first nine months of its fiscal year, United Press International reported.
National President E.F. Dolansky said the figures represented a 31 percent increase from the $8.1 million (94 cents) reported for the same July-to-March period a year ago.
Operating revenues for the nine months increased 12 percent to $487 million.
Earnings for the quarter ended March 31 were $5.1 million (61 cents) compared with $6.5 million (77 cents) for the same period last year.
Last year's figures were swelled by the heavy holiday traffic for Easter and Passover which fell in March 1978 but in April 1979. Revenues for the quarter were up 7 percent to $175 million.
Dolansky said earnings also were affected by the start of service on new routes, inflation and lower fares caused by discounts. The company also had redeployed its aircraft with greater emphasis on its international and Sunbelt domestic operations, he said.
Pan American World Airways, Eastern Airlines and Texas International all are seeking a merger with National. National stockholders will vote their preference at their annual meeting May 16, but any decision will be contingent on approval by the Civil Aeronautics Board.