Overseas National Airways

Overseas National Airways (ONA) was a supplemental air carrier (also known as an irregular air carrier or a non-scheduled carrier) during the period in which the Civil Aeronautics Board (CAB), a now defunct United States Federal agency, tightly regulated almost all US commercial air transport. From 1964 onward, supplemental carriers were charter carriers, but until 1964 they were charter-scheduled hybrids. Until 1950, ONA was known as Calasia Air Transport, and until 1947, Air Travel.

ONA was effectively two distinct carriers, separated by a two-year interval in 1963–1965 during which it fell into bankruptcy and became almost completely moribund, after which it was reconstituted by new ownership/management. From 1969 through the mid-1970s, ONA was one of the largest charter carriers in the United States, engaged in diverse activities including building the Mississippi Queen paddlewheel riverboat. However, in its last years the carrier faced increasing competition, uncertainty and poor financial results and in 1975–1977 suffered the loss of three aircraft in accidents within a 16-month period, including two DC-10s within two months. The carrier chose to liquidate in 1978 outside bankruptcy.

History

Early days

San Francisco-based Air Travel was incorporated in California on May 18, 1946 by George W. Tompkins, a former World War II Navy transport pilot who obtained a war surplus C-54 through preferences for returning veterans. In 1947, Air Travel became Calasia Air Transport. The carrier was issued its "Letter of Registration" on 12 August 1947 (in lieu of certificate, as was standard for irregular airlines at the time). Also in 1947, Calasia started operating its fleet of five leased C-54s under contract to Transocean Air Lines until January 1950. In July 1950, Overseas National Airways was incorporated in Delaware,New Charters Filed, Wilmington (DE) News Journal, July 18, 1950 - Clipping at Newspapers.com. and ONA started operating in the Pacific under contract to the Military Air Transport Service (MATS) (North Korean troops crossed into South Korea on June 25, 1950). In 1954, ONA was an applicant in a CAB case in which Seaboard & Western Airlines was certificated as a scheduled transatlantic cargo carrier. ONA was judged able but not as able as Seaboard, which, based on 1953 data was about three times the size of ONA, whether by fleet (12 DC-4s vs 4) or revenues. ONA's 1953 revenue was 100% military, split 52/48 passenger/cargo.

Military charter carrier

The CAB tightly regulated almost all commercial air transportation in the US, intentionally suppressing competition including regulating all fares as well as determining where scheduled airlines flew.

Until 1960, a major exception in this regime were military charter contracts, which were competitively bid. The CAB had to accept this situation because the US military permitted so-called Part 45 carriers to bid for military charters. Part 45 airlines were not common carriers (did not offer services to the public), and thus escaped CAB regulation. Any attempt by the CAB to impose minimum military charter bids on CAB-regulated carriers could be undercut by Part 45s. Thus military charters were a competitive free-for all. In 1959, for instance, the US military invited 97 carriers to bid for charter work.

This was relevant to ONA because until 1963, it was almost entirely a military charter carrier. In only three years did it have significant civil (commercial) business (see Table 1), including running 140 transatlantic charters in 1959. Once the Korean War was over in 1953, ONA was unable to sustain its financial performance which degraded substantially by the end of the decade. In 1959 ONA bid so aggressively for international MATS contracts that it won over half the awards by dollar value, stripping Trans World Airlines (TWA) and Pan Am of their former MATS business. To handle the volume, ONA leased nine DC-7s to augment its core fleet of four DC-6s. As Table 1 shows, 1960 ONA revenue increased dramatically from 1959, but it also suffered a substantial loss.

+ Table 1: Overseas National Airways Financial Results, 1952 thru 1960USD 000 195219531954195519561957195819591960Operating revenue4,348 4,272 1,547 2,042 2,075 3,557 6,792 10,639 23,985 Profit (loss) before tax119 290 18 243 (60) (318) (401) (1,689) (2,087)% of operating revenue: Military charter 100.0 99.6 100.0 96.1 64.4 45.2 76.0 98.1Civilian charter 0.0 0.0 0.0 3.9 35.6 45.4 20.1 0.7Scheduled 0.0 0.4 0.0 0.0 0.0 1.7 0.6 0.3Other 0.0 0.0 0.0 0.0 0.0 7.8 3.3 1.0Operating revenue: % of industry(1)6.1 6.1 2.8 2.7 3.1 7.0 10.4 13.9 28.7Industry(1) rank3 3 13 10 14 4 4 3 1 (1) Among supplemental air carriers

ONA's 1960 gambit contributed to a substantial change in military charter contracting. US scheduled carriers had long been unhappy with competitive MATS bidding. ONA's audacious bid motivated TWA, Pan Am and others to press their case with the military, Congress and the CAB. Separately, in February 1960, a report to President Eisenhower recommended, among other things, and the President approved, that Part 45 carriers be excluded from international MATS bidding. With Part 45s no longer a factor, in July 1960 the CAB said it no longer accept competitive bidding for military business. The CAB duly set a minimum rate for international MATS flying. With price no longer a variable, MATS ranked bidders according to their ability to provide (1) turbine (jet or turboprop) equipment with cargo capability, (2) turbine equipment (3) piston equipment with cargo capability in that order.MATS Awards First Contracts for Jet Passenger Service Overseas Vacaville (CA) Reporter, September 9, 1960 - Clipping at Newspapers.com. In 1960, no supplemental carrier had long-range turbine equipment (even in 1964, all supplementals together had only six such aircraft, against 427 among the scheduled carriers) so this substantially advantaged the scheduled carriers. When the first set of bids was announced later in 1960 subject to these criteria, Pan Am was on top with 20.5% of the dollar value and TWA was second with 18.6%. ONA's share was 8.5%.

ONA of this era had its main operational base at Oakland, a smaller base in New York and a small headquarters in Washington, DC.

1963–1965 bankruptcy and rebirth

In October 1963, George Tompkins said that supplementals didn't work without military business and ONA was having trouble obtaining it.Supplemental Airlines Have Trouble, Tri-City Herald, October 20, 1963 - Clipping at Newspapers.com. October 1963 was eventful for ONA: operations ceased on the 4th and the company entered bankruptcy on the 28th. Tompkins's bankruptcy affidavit noted jets rendered ONA's fleet obsolete. Liabilities were $3.5 million (about $36 million in 2024 dollars), assets only $0.5mm. Ironically, in the same month, the CAB selected ONA as one of three supplementals to receive transatlantic charter authority (eliminating the need to ask CAB permission for each such charter) and sent the recommendation to the White House for required approval. In February 1964, when President Johnson signed off, the CAB had still not revised the selection to account for ONA's defunct state. The White House noticed and Johnson declined that part of the recommendation. Also in February, Tompkins took a position at a Fort Lauderdale real estate firm.NAREB's President Due At Area Realtor Event, Fort Lauderdale News, February 15, 1964 - Clipping at Newspapers.com.

G.F. Steedman Hinckley was a former ONA pilot and executive. Hinckley was from old money (his birth was announced in society pages and he dated Rockefeller debutantes)."New Grandson In Steedman Family," Santa Barbara Morning Press, November 10, 1931The Smart Set Aniston (AL) Star, January 13, 1957 - Clipping at Newspapers.com. (the Flight 032 video in External links contains a brief clip of Hinckley speaking after the crash). Louis Marx Jr (son of toy tycoon Louis Marx), was a Princeton classmate. Marx was a childhood friend of Dan Lufkin, of Donaldson, Lufkin & Jenrette (in which Marx invested). Marx and Lufkin were among Hinckley's partners in funding ONA's July 1965 bankruptcy exit and October 1965 resumption of operations, when Hinckley was just 33 years old. Many former ONA employees returned including George Tompkins as chairman. Retired Hall of Fame baseball player Hank Greenberg was on the board. Hinckley believed the superior economics, speed and comfort of jets would boost air travel and increase demand for commercial charters. In April 1966, the CAB gave ONA the right to fly Atlantic charters. The CAB had a strong preference for jets and ONA had two DC-8s coming for summer 1966 whereas two supplementals that already had Atlantic rights, American Flyers Airline and Saturn Airways, had yet to obtain such equipment. ONA also secured a contract through the Military Airlift Command (MAC), successor to MATS. Jet operations started June 1966.

Success As Table 2 shows, ONA was immediately profitable in 1966, followed by two more highly profitable high-growth years. 1969 was less profitable, but in that year, ONA was the second largest supplemental by revenue, behind only World Airways. At the end of 1966, ONA had two DC-8-55Fs and four DC-7s, with a DC-8-63 on order and two optioned. In June 1967, ONA completed an initial public offering, raising over $10 million (over $90 million in 2024 terms).item under Columbia Pictures Cancels 2-1 Split, Boston Globe, June 30, 1967 - Clipping at Newspapers.com. By year end, the airline added cargo DC-9s to its fleet for the US Air Force Logair domestic cargo contract."Second DC-9 Added to AFLC LOGAIR Fleet," Hill Top (Ogden, Utah) Times, December 15, 1967 - Clipping at Newspapers.com. In January 1968, it committed to eight Lockheed L-188 Electra turboprop cargo conversions. In June 1969, ONA ordered three DC-10s, with three options, launching, with Trans International Airlines, a convertible (passenger/freight) version of the DC-10 that became known as the DC-10-30CF. In 1970, ONA had a fleet of five DC-9 freighters, four DC-9 passenger aircraft, eight Electra turboprop aircraft and five DC-8s, of which three were stretch models (60-series DC-8s). In 1972, when ONA announced its new maintenance base in Wilmington, Ohio (discussed below), part of the rationale was it was to be an operational center for its DC-9 and Electra domestic cargo business, both military and the flying of car parts for Ford from Detroit Willow Run Airport. + Table 2: Overseas National Airways Financial Results, 1965 thru 1978(1)USD 000 19651966196719681969197019711972 197319741975197619771978Operating revenue: Military charter147 5,034 10,510 15,157 25,586 28,459 26,551 23,805 23,521 21,612 17,993 9,963 4,298 Civilian charter67 5,535 8,364 14,051 29,674 27,572 26,811 34,013 45,336 53,694 64,830 62,441 69,482 20,513 Non-transport2 37 324 485 529 1,173 2,427 39 5,510 8,680 7,627 8,522 3,846 Total216 10,606 19,198 29,693 55,789 57,204 55,789 64,504 69,181 82,725 95,121 88,060 87,969 28,659 Op profit (loss)(287) 1,637 2,396 5,559 1,920 1,195 511 (1,145) (6,313) 564 (379) (12,661) (187) (4,170)Net profit (loss)(479) 907 1,209 3,304 (677) 3,927 (630) (4,474) 2,062 1,671 (3,922) (12,437) 7,041 Op margin (%) −132.9 15.4 12.5 18.7 3.4 2.1 0.9 −1.8 −9.1 0.7 −0.4 −14.4 −0.2 −14.6Industry rank(2)12 6 6 6 2 2 4 2 3 3 2 2 3 5 (1) Airline only, as filed with the CAB (2) Among supplemental air carriers

Diversification