Sunday, April 8, 2012

PSA's L-1011 Experiment

In 1970 California intrastate carrier Pacific Southwest Airlines (PSA) was flying high.  From its humble beginnings in 1949 with a single DC-3 the airline had grown to become the dominate carrier in California, posting 15 straight years of profits.  PSA was the original pioneer of the low cost, high frequency model, which Southwest Airlines later made famous.

PSA Founder Ken Friedken believed that he could carve out a very successful niche providing passengers with low cost, high frequency flights between California's major cities.  Because all of the flights would take place within the state of California, his airline would not be tied to the restrictive policies of the Civil Aeronautics Board, which set prices and regulated all interstate carriers in the United States at the time.  Friedken theorized that if the airline priced its fares low enough it could attract passengers away from the railroads and provide an alternative to the automobile.

The formula was a smashing success, unfettered by the CAB, PSA was free to set its own ticket prices and start new routes as it saw fit.  In order to expedite the passenger boarding process the carrier didn't assign seats, and it also maximized daily aircraft utilization through quick ground turnarounds, all of these measures helped to keep costs down.

The airline branded "The World's Friendliest Airlines," developed a reputation for unmatched customer service.  It even went so far as to paint smiles on the noses of all its aircraft, nicknaming them "Grinningbirds".  Passengers flocked to the airline, attracted by the low fares, but they stayed because of the airline's legendary service.  

By 1970 PSA served 7 destinations across the state of California from its base at San Diego's Lindbergh Field earning a profit of $3.6 million and transporting over 5 million passengers that year.  The core of the airline's business was shuttling travelers up and down the coast between San Diego, Los Angeles and San Francisco.

Passenger traffic throughout the previous decade had grown rapidly so much so that airline terminals were becoming overwhelmed and airlines worried that if the pace of growth continued the whole system might grind to a halt under the weight of the demand.  The 747 whose entry into service in 1969 heralded the arrival of the wide body area, seemed to be the ideal solution to meet the increasing demand and reduce the strain on overwhelmed airport facilities.  With the added capacity that widebody aircraft like the 747, DC-10 and L-1011 provided airlines could consolidate several narrowbody flights into one, thus reducing airport congestion.  

PSA agreed, and in 1970 signed a contract with the Lockheed Corporation for two L-1011-1's, which was still undergoing certification testing at the time.  The airline planned to introduce the aircraft on its high density commuter routes between SAN-LAX-SFO, with delivery of the first aircraft slated for 1972.  However shortly after signing the contract, the airline learned that the L-1011's sole engine supplier Rolls-Royce had gone bankrupt.  With the future of the aircraft program now in doubt PSA canceled its order, and re-evaluated the competing Airbus A300 and McDonnell-Douglas DC-10 products.


Rolls-Royce had greatly underestimated the development time of the RB211, a complex new engine design which included use of revolutionary composite fan blades.  Unfortunately the light weight composite blades suffered quality control issues and were prone to fracture.  To remedy this situation Rolls-Royce was forced to redesign the fan to incorporate traditional titanium blades which increased the weight of the engine significantly.  The resulting production delays and cost of the redesign placed the company in a tenuous financial position.  The added costs meant that the unit purchase price of the engine agreed upon by Lockheed was below breakeven for Rolls-Royce.  The British government was forced to take control of the insolvent company and eager to continue development of the RB211 engine tried to renegotiate a higher unit price for the RB211 with Lockheed.

Lockheed had its own financial problems, oweing to development of the C-5A Galaxy, which was based on a fixed price contract, with all cost overruns having to be payed out of pocket by the manufacturer.  Eventually the government, not wanting to loose a front line military aerospace company bailed the company out, guaranteeing loans of up to $250 million.

Lockheed and Rolls-Royce finally settled on a price for the redesigned engine which would put the company back in the black and allow Lockheed to avoid a costly delay to certification while it redesigned the the aircraft to accommodate a competing engine from General Electric or Pratt & Whitney.


PSA's first L-1011-1, at Lockheed's Palmdale plant awaiting delivery, note the stairs leading to the lower level lounge
 
In 1972 PSA convinced that the L-1011 was the right aircraft for its future, recommitted to the L-1011 signing a contract for five aircraft, with two scheduled for delivery in 1974 and one each in 1975, 1976 and 1977.  The airline opted for a high density single class cabin configuration seating 296 passengers.  PSA also became the only airline customers to select the lower level lounge option offered by Lockheed on the L-1011.

The lower level lounge in PSA's configuration offered 16 saleable seats and was connected to the main passenger cabin by a staircase.  In order to meet FAA certification standards to allow passenger occupation during takeoff and landing extra structure had to be added to the belly of the fuselage in case of a wheels up landing.  The lounge occupied part of the lower cargo compartment and galley space, which was the main reason no other L-1011 customer selected the option.

Artist Rendition of the L-1011 lower deck lounge option, from a Lockheed Corporate sales brochure
 
For PSA though the lower level lounge held one key advantage the entry door contained an integral air stairs which allowed for ramp loading of passengers at airport's in its system that were not equipped to service widebody aircraft.  Passengers could enter the aircraft through the lounge and climb the stairs to the main passenger cabin.  The carrier felt this option would help expedite the boarding of the airplane and reduce ground turn times.

However before the airline could take delivery of its first aircraft the 1973 Oil Crisis hit, and fuel prices which had been hovering around 11 cents/gallon shot up to 33 cents/gallon almost overnight.

PSA's first L-1011 named "Mother Grinningbird" entered service on August 1, 1974 while the second aircraft was loaned to Lockheed to be used for sales purposes at the Farnborough Air Show, being placed into regular service at the end of October.  It quickly became apparent to the airline that the L-1011 was not built for its high density commuter operation.
  
Interior shots of PSA's first L-1011 taken at the delivery ceremony
 
For one the airplane just wasn't designed for quick turn arounds like the 727.  The L-1011's size and height meant that everything from provisioning the aircraft, fueling and unloading the baggage compartments took longer.  The airline also found that by reducing flight frequencies on its key trunk routes between San Diego, Los Angeles and San Francisco they lost customers.  It turned out that passengers especially business travelers prefered having the flexibility its previous schedule had offered and weren't willing to wait three to four hours between flights to fly on the larger L-1011.

All of the airline's cost models that supported the decision to purchase the L-1011 were predicated on fuel prices in the 9-11 cents/gallon range, but by the time of the airplane's first revenue flight in August of 1974 the price of fuel was hovering around 33 cents/gallon which represented a 200% increase in cost for the airline.  At these prices there was just no way to make the numbers work for the L-1011 and the airline realized it needed to dispose of the aircraft and quickly.

But PSA wasn't the only airline to realize this as airline's around the world in response to the rising fuel costs began to dump fleets of almost new widebody 747s, DC-10s and L-1011s on the market.  The excessive supply of airplanes, hurt the resale value of the aircraft.  The problem for PSA was exasurbated by the airline's decision to opt for the lower lounge option.  This feature which occupied a good portion of the forward cargo hold along with the lack of a full galley made these aircraft very unattractive to potential buyers as the loss of revenue cargo space made it difficult for airlines to make money with the aircraft.  The costs of reconfiguring the airplane could not be justified given the ready supply of other suitable widebodies.
  

The last PSA L-1011 was withdrawn from service in April of 1975, and with no buyer headed off to the desert for storage.  The airline planned to return the aircraft to service in June of that year to cover the anticipated increased summer travel demand but those plans never came to fruition and the aircraft continued to gather dust in Arizona.  The airline also proceeded to cancel the remaining three aircraft on order, which by that time were in various stages of production.  Lockheed sued PSA for breach of contract.  The parties eventually came to terms with PSA agreeing to send one of its L-1011s on a world wide promotional tour on behalf of Lockheed, while German customer LTU eager to standardize its L-1011 fleet traded in 2 ex-Eastern airplanes for the three undelivered PSA aircraft.  

The two original aircraft were subsequently leased to Lockheed who subleased them to AeroPeru until their new L-1011-500s could be delivered.  The ex-PSA aircraft were then returned to Marana in 1982 where they sat until finally three years later in 1985 PSA found a willing buyer in Worldways Canada who purchased both aircraft.

In the end PSA's widebody experiment lasted only nine months.  While it ultimately proved to be a failure, without the spike in fuel prices one wonders whether the experiment may have lasted a little longer if not proven itself to be profitable at least for a time.

1 comment:

  1. I never knew about the PSA L1011 lounge. Excellent photos. As a mid-westerner, I never flew on PSA but I'm guessing I would've enjoyed the experience.
    Nice job !

    ReplyDelete

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The author is an independent aviaion consultant with 7 years of industry experience and holds a Masters Degree in Aviation Safety from Embry-Riddle Aeronautical University

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