Flamboyant O. Roy Chalk has made millions in Manhattan real estate, but as a transportation magnate he has sometimes spun his wheels. He failed in a bid to buy the New York City subway system some years ago, and the deteriorating bus service provided by his D.C. Transit System has annoyed Washingtonians. He founded Trans Caribbean Airways in 1945, and has since run it as a family company: his wife is secretary and interior decorator, his brother-in-law is executive vice president, and a son-in-law is a director. The line lost money heavily last year, and Chalk has for some time been trying to sell it. Last week American Airlines agreed to purchase Trans Caribbean for about $18 million worth of stock.
Many Routes, Few Flights. Trans Caribbean pioneered low-fare service between New York and San Juan; in 1958 it became the first and only U.S. airline to make the jump from non-sked to scheduled carrier. But in recent years it has lost so much traffic to Pan American and Eastern that it has been able to fill only 7.1% of its first-class seats and 58.5% of those in the coach section. Since 1968, Trans Caribbean has picked up new routes to the Virgin Islands, Haiti and the Netherlands Antilles. It has been unable to exploit these routes fully because its fleet consists of only nine jets. In the twelve months ending Nov. 30, Trans Caribbean actually flew only 81% of its scheduled aircraft miles. Many flights were cancelled for mechanical reasons or because of bad weather.
Chalk's line, which flies only out of New York, Newark and Washington, sorely needs the traffic that American can generate for it. By taking over Trans Caribbean's routes, American plans to fly vacationers from such cities as Boston, Chicago and Detroit to the Caribbean rather than making them transfer to other lines at coastal airports. The addition of Trans Caribbean would also make American, which hopes to begin flights to Hawaii and the South Pacific this year, a two-ocean airline.
Big Share. The proposed merger continues a movement toward airline consolidations that began in November, when Northwest and Northeast Airlines agreed on the first major merger since 1961. If the Government allows American to buy out Trans Caribbean, Chalk will become probably the largest individual shareholder in American. He would get approximately 245,000 common shares, based on his last reported Trans Caribbean holdings. That would easily be enough to entitle him to a seat on the American board. Airline men think, however, that Chalk has had about enough of transportation ventures and will devote himself mostly to his other interests, which include radio and television stations and newspapers.