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Earlier in the 1950s, Onassis became intrigued with whaling, ran a 20-ship fleet. When his vessels invaded the territorial whaling waters of Peru, the Peruvian navy confiscated his flagship only to discover that, thanks to a Lloyd's insurance policy, Onassis was not losing a penny. Divining correctly that the whaling industry faced hard times, Onassis sold his fleet to Japan in 1956, at a profit of $8.5 million.
His main strength is tankers, and wisely so. In the mid-1950s, when Onassis began building supertankers, which later grew to 250,000 tons, he was told that they would never pay because they could not negotiate the Suez Canal. When Nasser closed the canal in 1956, Onassis made more millions with his swift hauls around the Cape.
The key to success in the supertanker business is collateral. Like the other independents—a group that soon came to be known as the Argonauts—Onassis practiced a clever technique of self-financing. Because the oil companies were unwilling to tie up cash reserves in new hulls, he only asked them for long-term (seven years or more) charters to haul their crude. Armed with the charters, he made firm contracts with shipbuilders, banks and insurance concerns, pointing out that the new tankers, with life spans of up to 25 years, would earn back their cost in roughly a third of their working life.
Floating Crap Game
Successful as the scheme proved, the oil-tanker business remains a fragile floating crap game in international finance. Fortunately for Onassis, the demand for petroleum imposed by the Marshall Plan, the Korean War and now Viet Nam has kept the tankers cruising through the past 30 years at an ever accelerating pace. He has also been aided along the way by Oilman John Paul Getty, 75, whom Onassis admired and courted.
According to an American associate, Eliot Bailen, Onassis "is not an officer of any corporation, domestic or foreign, but an owner holding stock that gives him control of corporations." As a result, he controls some 100 companies in a dozen nations, operating a fleet of perhaps 4,000,000 tons displacement under "flags of convenience." Beyond that, he is engaged in developing the "supertankers of the air," the next generation of giant jets and shuttle airbuses. His investments include hotels, banks, and seaports. But oil shipping remains his principal source of income. In a moment of self-deprecation, Onassis once described himself as a "mere porter—a transporter of oil from here to there. Who wants to be a porter all his life?" Many might, at his pay level.