• U.S.

Business: Wooing National

2 minute read
TIME

Having once dressed up its image with an anthropomorphic ad campaign (“I’m Cheryl, Fly me”), National Airlines now has suitors buzzing all around. Object: merger or acquisition. Little Texas International has bought 23% of National’s stock. Mighty Pan Am has acquired 24% and wants much more. Last week Eastern Air Lines Chairman Frank Borman, the ex-astronaut, said his line would bid $50 a share for the stock, or $9 more than Pan Am’s offer. So intense has been the wooing that National Chairman Lewis (“Bud”) Maytag, 52, collapsed from exhaustion and briefly entered a Colorado hospital to convalesce.

Everybody wants National because of its fleet. Eastern had to pay $778 million for 19 modern European Airbus jumbos; buying all of National’s shares would give Eastern 55 modern jets for $427 million. U.S. airlines are suffering from a severe equipment shortage, forcing them to jam more and more seats into available cabins. Deregulation is aggravating the shortage because many new, small airlines are being formed, and fare cuts are luring ever more passengers into the air.

Though Borman swears he is serious about the bid, airmen gossip that Eastern is merely trying to delay the merger between National, its competitor, and Pan Am. Civil Aeronautics Board staffers are said to favor a Pan Am-National combination because it would join two non-duplicating route systems. An Eastern merger makes far less sense because the purpose of deregulation, to stimulate competition in the industry, would be frustrated if National were removed as a competitor on 19% of Eastern’s routes.

It is by no means certain that Pan Am will win, though Maytag was urging National’s stockholders to vote in favor of a Pan Am merger. Another possible bidder is circling overhead. Northwest Orient Chairman Donald Nyrop dined last month at “21” Club, the Manhattan saloon, and discussed a merger with none other than National’s Bud Maytag.

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