Directors of Braniff International Corp. today followed several other major airline companies and voted to omit the regular quarterly dividend on the corporation's common stock.
Braniff Chairman Harding L. Lawrence cited the company's first-quarter loss of $21.7 million, the continuing escalation of fuel costs and fare increases that have failed to keep up with increasing costs as reasons for the board's action.
During 1979 Braniff paid 9 cents quarterly for every share of common stock until the last quarter, when the dividend was reduced to 5 cents. The action of the board of directors came after the company's annual shareholders meeting, held at the Braniff world headquarters complex.
Despite a record loss of $44 million last year, Lawrence told shareholders the airline is "well postured for a return to profitability" if the Civil Aeronautics Board acts favorably on proposals to give the airline industry more flexibility in pricing, an item the CAB plans to take up next week.
Complaining that Braniff's major problems stem from an inability to pass through quickly enough to airline fares the "almost unbelievable" increases in fuel costs, Lawrence said Braniff fully supports total deregulation of pricing. "To be effective competitors in the 1980s and to actually be masters of their own destiny as the deregulation law envisions, the airlines must have pricing freedom to match the oeprating freedom to match the operating freedom they already enjoy," he said.
In an interview following the meeting, Lawrence said fare freedom wouldn't mean that all fares would go up. "I'm not saying that fares would go up 10, 20 or 30 percent; I'm saying the market-place will decide it," he said.
In his report to shareholders, Lawrence was expecially optimistic about Braniff's future compared with that of its competitors in the changing environment. "We have made our investments and they are in place for the long term, while our competitors will have to spend billions to match what we have done," he said.
Braniff boasts an extensive worldwide route network with many new cities and routes added last year; its new $75 million world headquarters office and training center was completed last year before construction costs and interest rates soared; and it possess a fleet of airplanes that is the second newest in the domestic industry next to Delta Airlines'. Because of its past and continuing aircraft-replacement program, the average age of Braniff's 109-plane fleet will be less than six years by the end of 1982, Lawrence said.
In striking contrast to the annual meetings of many other airlines, stockholders here asked no tough questions.