American Airlines' officials yesterday angrily rejected allegations being investigated by the Civil Aeronautics Board that the Dallas-based airline might have engaged in a variety of "dirty tricks" in an attempt to push Braniff International, its fiercest competitor, into bankruptcy.
American President Robert L. Crandall called the allegations "absolute lies" and "fabrications." David C. Frailey, American's vice president for public relations, called them "ridiculous charges made by some unknown sources with no evidence. American is too busy running an airline to engage in any 'dirty tricks' against Braniff."
At a press conference in Dallas yesterday, Braniff Vice President Sam Coats said Braniff was cooperating with the CAB inquiry, and welcomed it. He said Braniff had not instigated the inquiry.
CAB officials confirmed that they had begun looking into a series of allegations but said it was too early to know if there was evidence of any wrong-doing. If evidence of illegal or improper tactics is uncovered, American presumably could be charged with unfair methods of competition. But CAB officials emphasized that their inquiry is at the earliest stages..
The two Dallas-based airlines, whose chairmen are brothers Albert V. Casey of American and John J. Casey of Braniff, have been locked in a fierce competitive struggle, especially since American moved its corporate headquarters to Dallas from New York in 1979 and proceeded to make Dallas, Braniff's traditionally strong base, a major "hub" for American.
One of the allegations questioned whether American might recently have created, deliberately or accidentally, a cash-flow crisis at the already-strapped Braniff by keeping up to $9 million worth of Braniff tickets in its revenue accounting department and suddenly turning them in to the industry clearing house all at once for collection from Braniff. For two months in a row, Braniff reportedly found it owed to others substantially more than it was owed from the clearing house, a circumstance it hadn't expected, forcing it earlier this month to defer for a week payment of half the salaries of its domestic employes.
"We did nothing differently from what we do every week and every month in the normal handling of payables and receivables between airlines," Crandall was quoted as saying.
Other allegations centered on charges that, in an underhanded corporate strategy designed to harm Braniff, American officials might have urged Braniff's creditors to "pull the plug" on Braniff before its discount fares hurt American; that American representatives might have reserved seats on Braniff flights for stranded passengers and canceled the reservations at the last minute; that American pilots might have engaged in runway tactics that delayed Braniff flights at Dallas/Fort Worth Regional Airport and that American might have fomented talk within the travel industry of a possible Braniff failure so that agents and others would be encouraged to book tickets on other airlines.
Coats said in his news conference that for some months Braniff had heard comments from travel agents, the financial community and the public raising questions about American's response to Braniff's low-fare, low-cost strategy. "We have become increasingly concerned that if those allegations are true they are having an adverse effect on our efforts to build a brand-new Braniff."
The battle between the two airlines intensified late last year when Howard Putnam, who left the successful Southwest Airlines to become Braniff's new president, converted the airline to Texas Class, a one-class service that lowered fares on its domestic routes to levels much lower than the coach fares in effect at the time. American grudgingly matched Braniff's low fares.