IN THE COCKPIT WITH TWA'S PILOT-PRESIDENT
Longtime pilot Bill Compton is flying TWA toward profitability
The passengers had boarded, the plane was fueled, and the cockpit had been checked. Yet the TWA jet sat idle at the gate in St. Louis, and Captain Bill Compton wasn't very happy. He clenched his jaw and got on the radio: "We need a tug." Minutes passed. No help arrived to push the plane away from the gate. In the race to get to San Francisco on time, Flight 177 had already fallen behind.
Unlike the thousands of other delays at airports across the country on that April day, however, this one would not go unnoticed by those higher up the ladder. Before a week had passed, TWA would analyze its entire operation at St. Louis to determine whether tug delays were common. It was all the doing of the pilot--who has a little bit of pull back at company headquarters.
In fact, William F. Compton, when he isn't out flying MD-80s, is the president of Trans World Airlines Inc. A pilot at the carrier for the past 30 years, he joined the company board as a union representative in 1993 and was picked to join management in a 1996 shake-up. Today, Compton is the only major airline executive whose voice you might hear over the intercom on your next flight. He's also the latest in a line of pilots-cum-managers at TWA that includes Charles A. Lindbergh and Howard Hughes.
"You get thousands of written reports telling you how things are going, but you get the best view from the shop floor," says the affable, white-haired 51-year-old. "My shop floor is the cockpit." So despite a work schedule that keeps Compton at the office until 11 most nights, he gets airborne for a couple of days a month. Each time, he comes back with a list of things that need improvement, and he fires off inquisitive E-mail to the company's vice-presidents. Compton has had the white lines repainted on the St. Louis airport tarmac so that baggage trucks no longer get in the way of planes. And he fired a manager at another major airport when, four months after Compton had been there, bags were still routinely late being loaded onto planes.
Thanks largely to his leadership, TWA is in the midst of a dramatic operational turnaround. First as head of operations, and since his December, 1997, promotion to president, Compton has overseen TWA's efforts to get its planes to their destinations on schedule. The strategy: On-time planes mean more business travelers, which means more revenue and more financing, which will allow TWA to invest in the newer planes needed to complete the turnaround.STILL IN THE RED. So far, Flight 177 isn't much of an advertisement for the strategy--it's running 18 minutes late before it even leaves the gate. But Compton and the TWA management team have a better story to tell about the airline's performance generally. By rallying the carrier's 22,000 employees--the same people he has been eating dinner with in airport motels for years--Compton helped lift the airline's on-time ranking from dead last in 1996 to second in 1997. The percentage of Trans World's seats being filled is now the highest since airline deregulation in 1978, and on Apr. 22 TWA reported its best first quarter in a decade.
Of course, it still lost money--$54 million, including a noncash charge to issue stock to employees--and many challenges remain for the carrier. Consumers view it as a faded brand with a fleet full of old planes. Lingering uneasiness over the crash of Flight 800 has not helped. And if TWA's financial position is improving, it has a long way to go. Margins, as well as the average fares it collects from passengers, are near the bottom of the industry, in part because TWA attracts far fewer high-paying business passengers than any other major carrier. Though analysts expect it finally to turn a slim profit this year, its weak cash position, at $346 million, could leave it vulnerable in a slowdown. "This is one of the greatest environments for the airline business in a very long time, and TWA is not making any money. That's scary," says one big investor.
On top of all that, with the recently announced marketing alliance between American Airlines and USAirways and a pending one between United and Delta, TWA will have to overcome rivals with even more convenient schedules than before. Indeed, TWA's bid to survive will be a test of whether today's skies have room for anything but behemoths and low-fare carriers. "TWA did not provide a good product for north of a decade," concedes Compton, as Flight 177 breaks above the clouds and moves beyond the 10,000-foot ceiling under which all cockpit chatter must relate directly to the flight. "People don't come back in the blink of an eye."
Still, it's hard to deny the progress that Compton, CEO Gerald L. Gitner, and other executives have made in the 18 months since they took over. "TWA is working on all the things that need to get worked on," says Cameron Burr, president of Burr & Associates Inc., a New Canaan (Conn.) aerospace-investment firm that owns about 1% of TWA. With $500 million in new financing over the past six months, the carrier has freed itself from debt to Carl C. Icahn and no longer seems an imminent candidate for a spot next to Eastern Air Lines in the corporate dustbin.
The fight to save the company is, in many ways, a personal one for Compton. He has worked there since he was 21, and he even met his wife, a TWA flight attendant, through the company. As for his love affair with planes, that began in Peru where, as a child, Compton used to watch his father flying for a subsidiary of Pan American World Airlines Inc. "I'd sit out on the ramp in Lima and look at the DC-3--with only 20 seats, and it would only go 120 miles an hour--and I'd say, `Now, look at this big airplane,"' Compton recalls as Flight 177 soars over the Rockies at 530 miles an hour. "I knew I wanted to be a pilot."FLIGHTS TO MECCA. Fresh out of Miami-Dade Community College with an associate degree in aerospace in 1968, he passed up offers from Pan Am, Eastern, and Delta and joined TWA because it was then the most global of U.S. airlines. However, the carrier, which was already in decline, had hired too many pilots in the 1960s. By 1971, Compton was put on furlough, and he returned to South Florida, where, as general manager of the Opa-Locka Airport flight school, he obtained his first business experience. Compton expanded the school's fleet from 8 planes to 38 and was put on the company's board of directors at the age of 25.
TWA called him back soon, only to release him again in 1973. Eager to stay in the cockpit, Compton was forced to leave the country. Nigeria Airways Ltd. signed him up to fly Muslim pilgrims to Mecca from the country's capital, Lagos--a city whose airport nowadays is often listed on signs at American international airports warning travelers that it's among those that the U.S. State Dept. considers unsafe. ("The signs are right," Compton says.)
Twenty-five years ago, the Lagos airport wasn't exactly state of the art either. The Nigerian government was paying for the flights to Mecca and had the armrests in the Boeing 707 removed so that a fourth person could squeeze into each row. More often than not, at least one of the passengers would die on board during the return leg of a pilgrimage. Compton explains: "Coming back from Mecca, the will to live was gone."
Once, Compton returned to his room at the Lagos airport hotel to find it flooded with sewage and his shoes ruined. When the airline fell far behind on paying wages, the crews flew the planes to London and refused to return until they were paid. The next day, a man arrived with a case full of $100 bills. By the time Compton returned to the U.S. after seven months, his 6-foot, 2-inch body weighed 132 pounds. "That was where my hair turned white," he says.
From Nigeria, Compton moved on to Iran, where he flew cargo flights into Tehran, bringing luxury goods from Frankfurt, London, and Paris to be snapped up by the Shah's myriad cronies. TWA called him back again in 1976, but by the time Compton's third furlough came along, in 1981, he was ready for calmer pursuits. Then settled in San Francisco, Compton began running a small investment and real estate business.
Back on the job at TWA in the mid-'80s, Compton ran for a union post, arguing that Icahn's proposed cuts were too severe. He says he never planned to leave the cockpit for nearly full-time union or management work: "I didn't have an ambition to be chairman [of the local union] or to do this job." But many people who have worked with him, and who remember how carefully he prepared for meetings with management, don't buy that. "I think it's something he at least always had his eye on," says Joe Chronic, a 26-year veteran and the current holder of Compton's old job as chairman of TWA's pilot union.BOX SCORES. Compton's ascent at TWA may not be over, either. "Bill has all of the qualifications" to be CEO, says Gitner, who co-founded People Express and who was part of the executive team that couldn't save Pan Am in the '80s. "It has been very pleasing to me to see how quickly he has picked up the management side." One sticking point: Compton is only two years younger than Gitner, and if TWA begins to slip, Compton would likely be seen as part of the team that didn't come through.
Compton's effort to improve TWA's operations began with a direct appeal to its employees. He wants them watching the carrier's on-time numbers as closely as he studies the St. Louis Cardinals' box scores.
Shortly after taking over, Gitner and Compton decided that reversing TWA's dismal on-time flight performance had to be their first priority. In early 1997, Compton chaired a group of employees that identified a dozen major reasons the flights were so often late. The culprits ranged from TWA's aging fleet--its older planes require frequent repairs that cause delays--to the fact that virtually any ground crew member was authorized to hold up a flight, no matter how trivial the reason. Careful always to talk about safety first--Flight 800 had crashed just months before--Compton traveled the country, convincing employees of the importance of a reliable schedule and gathering ideas on how to improve.
Now, employees receive daily reports about on-time performance--and only the station manager at each airport may hold up a flight. Moreover, departures are no longer delayed to ensure connections with incoming planes. While that may strand a few passengers, it gets hundreds more to their destinations on time by preventing the entire hub system from running late. But there's still work to be done. A tough winter in the St. Louis hub that caused many flights to be delayed has sent TWA back down to fifth place in on-time performance this year. "We had a good spurt, but now it's been more spotty," says Chronic.TOUGHEST TEST. So every flight becomes a miniature battle to win back the confidence of travelers who grew fed up with missing meetings because of TWA. "It got to the point in 1995 and '96 where I wouldn't wear a TWA T-shirt in my neighborhood," says Compton with a laugh. "I was afraid I'd get rocks thrown at me." With Flight 177 on autopilot, he starts to chew on the same lunch that passengers are eating back in coach while bantering with his 34-year-old co-pilot, Joe Tersteeg, whom he had met just that day.
Employee relations are probably the trickiest part of Compton's new job. Only two years after he was serving as the pilots' appointed advocate, he finds himself as the executive whom management's labor negotiators report to. That has strained Compton's friendships with some pilots, they say--and the toughest test is yet to come. The company's negotiations with its unions, which began last fall, will not be easy. After 15 years of concessions to keep the company afloat, TWA employees are paid far less and have less generous benefits than their counterparts at other airlines. The maximum that a pilot of an MD-80 can earn, for example, is $103 for each hour spent in the air, vs. an industry average of $160. Flight attendants, who often wander up to the cockpit when Compton is flying to plead with the boss for a better contract, have it worse, earning in the mid-$20,000s even with seniority. TWA agrees its workers need a raise, though a fight is likely over how big it should be. Still, both sides say they're confident they'll strike a deal by the summer.
As Flight 177 approaches the Sierra Nevada range, it's easy to put such thorny issues aside and appreciate the joys of flying. There are no clouds, and the cockpit has a 180-degree view of the mountains that separate Nevada and California. The sun's glare reflects off lakes dozens of miles away. Best of all, gentler headwinds have helped make an on-time arrival start to seem possible. "This must be a nice change of pace from the stuff you deal with," co-pilot Tersteeg says. "This," Compton replies, "is like playing hooky."
Touchdown comes at 1:50 p.m. Even with a short wait on the runway, the plane taxies into the gate just five minutes behind its scheduled 1:52 arrival, qualifying it as "on time." Compton's day, of course, isn't over. He will head back to the crew hotel, call the office in St. Louis, answer mail from employees, and review revenue projections. After all, wind and air-traffic control may have allowed Flight 177 to land nearly on time, but 254 other TWA jets came in late that day. On each one, he worries there may be some passengers who have decided they're fed up with TWA.By David Leonhardt at 31,000 feetReturn to top