American Airlines

American Airlines traces its origins back to several companies, one of which—Robertson Aircraft Corporation—began flying regular mail flights on April 15, 1926 using De Havilland DH-4 aircraft. Inspiration for the consolidation that eventually led to American Airlines, however, goes back to the Embry-Riddle Company, an airmail service company founded in 1925 in Cincinnati, Ohio. In 1927, Embry-Riddle won the mail contract to deliver mail from Cincinnati to Chicago, and on December 17 of the same year, began operational flights using a fleet of 10 Waco biplanes.

Embry-Riddle needed more money to expand, and Fairchild Aircraft Corporation showed interest in its modest operation. After some negotiations, on March 3, 1929, Fairchild organized The Aviation Corporation (AVCO), a company with the goal of financing not only Embry-Riddle but also a host of other small aviation mail operators, including Robertson Aircraft Corporation. AVCO had a board of 70 directors from the highest levels of U.S. business. Such was its financial power that within six months of incorporation, it had acquired nine airlines—including Colonial Airways Corporation and Universal Corporation. Later, in January 1930, Texas-based Southern Air Transport also became part of AVCO.

The large number of acquisitions set the stage for a reorganization of AVCO. Although AVCO owned many airlines and delivered mail between the east and west coasts, the company itself was a sprawling corporate mess. To streamline its organizational structure, AVCO formed American Airways on January 25, 1930. The new company would now have operating subsidiaries under its direct control. By this consolidation, American Airways became one of the 'Big Four' domestic U.S. passenger and mail airlines—the others being Eastern Air Transport, Transcontinental and Western Air (TWA), and United Air Lines.

By 1931, American Airways had several mail contracts that theoretically allowed a passenger to travel from the East Coast to the West flying only on American's airplanes. The owners of AVCO also aggressively worked toward capturing the important New York-Chicago route by acquiring Transamerican Airlines Corporation. American Airways had also inherited the key southern route for mail delivery after the famous 'Spoils Conference' in 1930 when Postmaster General Walter Folger Brown had distributed specific routes to particular airlines.

Major changes in the airline industry in 1934 affected the fortunes of American Airways. Franklin D. Roosevelt, soon after assuming the nation's presidency, canceled the air mail contracts in February 1934, thus rendering null and void the provisions of the 1925 Kelly Air Mail Act that stipulated how contracts for particular routes would be handed out to specific airlines. Roosevelt's decision was partly motivated by allegations of excessive public subsidy of airlines.

After a disastrous attempt to have the Army Air Corps fly the mail, Roosevelt renewed the mail contract system with the stipulation that airlines that had benefited from Brown's decisions in the past could not participate. Roosevelt also stipulated though the Air Mail Act of 1934 that the old aviation holding companies such as AVCO had to break up. As a result, AVCO sold off much of its share of American Airways. To reflect a break from its past, American Airways renamed itself American Airlines on April 11, 1934. The airline officially began service the following month. At the same time, it appointed a new president, Cyrus R. Smith, an ambitious executive who had come up through the ranks of Southern Air Transport.

At the time that Smith took command of American Airlines, the company was flying the 18-passenger Curtiss Condor, a plane that Smith considered inadequate to fulfill his vision of a transcontinental airline. In a move that would prove to be of great importance to the history of U.S. aviation, Smith convinced the aircraft manufacturer Donald Douglas to build a new aircraft with the roominess of the Condor and the speed and modernity of the DC-2. Although Douglas was reluctant at first, he eventually agreed when Smith decided to order 20 of the new Douglas Sleeper Transports (DSTs). The day-plane version of the DST was known as the DC-3.

American Airlines took delivery of the first DST on June 8, 1936 and introduced the plane on the New York-Chicago route 17 days later. These services, named the American Eagle and the American Arrow, set new standards for nonstop passenger flights. On September 18, 1936, American used a DC-3 aircraft to inaugurate its American Mercury service, a coast-to-coast 16-to-17-hour (depending on the direction) trip. Compared to the DC-2, the DC-3 was a vastly superior aircraft and its introduction by American Airlines marked the beginning of a new era in passenger aviation. Between 1933 and 1937, the company's passenger volume tripled, and the numbers increased 11-fold in the following five years. By 1939, American Airlines was flying the most passenger-miles of any domestic airline.

American Airlines had a special role during World War II by serving the military needs of the U.S. government. For example, it helped move U.S. troops to Brazil after the attack on Pearl Harbor in 1941. It also flew supply flights to places such as Iceland, Alaska, India, Morocco, Australia, and across the North Atlantic in support of the war effort. In the same period, the airline also lost some of its advantages in domestic flights, as the Civil Aeronautics Board (CAB) handed out new contracts for key routes to competing airlines. Airlines such as TWA and United began to compete with American on its important southern coast-to-coast route from New York to Los Angeles via Nashville, Dallas, and El Paso.

After the end of the war, competition for coast-to-coast flights remained a key part of domestic commercial aviation. The 2,500-mile (4,023-kilometer) trip was not only in high demand but also economically beneficial for the airlines. Three airlines, American, United, and TWA, fought fiercely over the rights to fly these routes. While the DC-3 was an excellent airliner for its time, its limitations prompted the airlines to look for improved alternatives that could reduce flight time. American Airlines began using the Douglas DC-4 cross country on March 4, 1946, for 13-to-14-hour trips. American was also the first airline to offer pressurized-cabin service when it introduced its DC-6 on the New York-Chicago route and, on May 20, 1947, on transcontinental flights. These coast-to-coast flights lasted about 11 hours.

American's main competitors for the transcontinental route were TWA and United. Through the early 1950s, these airlines vied with each other, buying new improved aircraft from either Lockheed or Douglas. TWA, for example, in October 1953, introduced the first regularly scheduled nonstop transcontinental service between Los Angeles and New York. Only six weeks later, American Airlines introduced its own nonstop service using the new DC-7 (which it had sponsored) in direct competition with TWA. The flight took roughly eight hours to complete.

Of the 'Big Four' domestic airlines, American Airlines was the first to begin domestic jet service using purchased rather than leased planes. On January 25, 1959, American began flying Boeing 707 airplanes from New York to Los Angeles. Through the 1960s, American used a mix of Boeing 720 and 727 aircraft. It also bought 30 of the British Aircraft Corporation (BAC) One-Eleven 401s, a big coupe for a British jet maker. Later in August 1971, American Airlines became the world's first airline to put the new wide-body Douglas DC-10 into operation. In terms of passenger-miles flown in 1969, American placed third, behind United and TWA but ahead of Eastern.

In 1968, Cyrus R. Smith, the president and guiding hand of American for nearly 35 years, retired. He had had a hugely successful career during which he had helped to make American one of the most important domestic airlines. Smith's legacy was not only in management; he had pioneered the use of hot in-flight meals, flight attendants (called stewardesses at the time), effective discount programs for frequent flyers, aggressive advertising campaigns, improved passenger reservation systems, and better air traffic management systems—all in the 1930s.

Despite the fall of many giants following the passage of the Deregulation Act in 1978, American Airlines remained important in the commercial aviation industry in the United States. It, in fact, benefited from the collapse of Eastern Airlines, when it acquired all of Eastern's routes into Latin America. If, in 1990, American was not a big player in the East Coast market, by 1992, it had become a major contender following the fall of Pan Am, Eastern, and TWA. At the start of the 21^st century, American, along with United and Delta, remains one of the three most powerful passenger-carrying airlines in the United States.

American Airlines' most visible recent action was the wholesale purchase of TWA in April 2001. The company plans to operate TWA temporarily as a subsidiary until it completely integrates all of TWA's employees and operations into American Airlines.

—Asif Siddiqi

References:

Allen, Oliver E. The Airline Builders. Alexandria, Va: Time-Life Books, 1981.

Davies, R. E. G. Airlines of the United States Since 1914. Washington, D.C.: Smithsonian Institution Press, 1982.

Heppenheimer, T. A. Turbulent Skies: The History of Commercial Aviation. New York: John Wiley & Sons, 1995.

Leary, William M. Editor. Encyclopedia of American Business History and Biography: The Air Industry. New York: Facts on File, 1992.

On-Line References:

'American Airlines.' C. R. Smith Museum,' http://www.crsmithmuseum.org/home.htm