Following the federal Airline Deregulation Act in 1978, Air California expanded its service to several destinations in neighboring states. In the 1980s, in addition to its California routes, it was flying to Chicago (ORD), Seattle (SEA), Anchorage (ANC), and Vancouver, B.C. (YVR) as well as to other destinations in the western U.S.
The airline was renamed AirCal in 1981, and it was merged into American Airlines in 1987.[5][6]
History
Startup
Air California originated in a December 1965 meeting in Corona del Mar by William Myers, Alan M. Kenison, Mark T. Gates, Jr., William L. Pereira, Jr. and Lud Renick to discuss air service from Orange County to San Francisco. At the time, air service from Orange County Airport was minimal. The population of Orange County in 1967 was about 1.2mm, up from only 216,000 in 1950. At that time, Orange County was the fastest growing in the country. California was then home to the largest intrastate airline in the United States, Pacific Southwest Airlines (PSA), which came to dominate the air travel within California. Air California was designed, in part, to do what PSA would not: serve Orange County. Airport officials had asked all major west coast carriers about serving Orange County Airport and none were interested.[7][8]
As a result of the meeting, Air California was incorporated in April 1966 and the same month, applied to the California Public Utilities Commission (CPUC) as a California intrastate airline for its first route, from Orange County Airport to San Francisco Airport. The CPUC approved the application in September, requiring a minimum of five frequencies per day. In December, Air California had an initial public offering and the airline launched its first services January 16, 1967, using two Lockheed Electra aircraft.[9][10]Total capital raised by first flight was $5.3mm, including $2.5mm from the stock offering.[8]
Role of the California regulator
Prior to US airline deregulation in 1979, as a California intrastate carrier, Air California was economically regulated by the CPUC, which in 1965 gained the right to regulate airline certification, market entry/exit and service quality for California intrastate airlines - the CPUC had always had the right to regulate intrastate airline ticket prices.[11] CPUC regulation was in contrast to most US airlines of the era, which were economically regulated by the Civil Aeronautics Board (CAB), the agency responsible for then-tight Federal airline regulation.
Air California did not make a net profit for the first five years (though it broke even on an operating basis in 1970 - see nearby table) and that respect, CPUC regulation was especially critical to the survival of Air California. (i) CPUC ensured that other than some minor routes, Air California did not compete with PSA, leaving the carriers with largely non-overlapping route networks. This left Air California free to concentrate its energies on competing with CAB carriers on its routes, which had higher costs. (ii) The CPUC approved higher airfares for Air California than for PSA was authorized on similar routes. (iii) The CPUC discouraged further new entry of intrastate airlines. (iv) in at least one case, the CPUC restrained PSA growth with the explicit goal of helping Air California.[12]
Air California Financial Results, 1967 thru 1973[13]
(USD 000)
1967
1968
1969
1970
1971
1972
1973
Operating revenue
4,354
8,849
13,686
16,144
19,729
22,905
27,023
Operating expense
5,295
9,992
15,540
15,950
20,304
21,905
23,956
Operating result
(941)
(1,143)
(1,854)
194
(575)
1,000
3,067
Interest
(258)
(616)
(564)
(596)
(460)
(376)
(343)
Pre-tax net
(1,199)
(1,759)
(2,418)
(402)
(1,035)
624
2,724
Operating margin
-21.6%
-12.9%
-13.5%
1.2%
-2.9%
4.4%
11.3%
Pre-tax margin
-27.5%
-19.9%
-17.7%
-2.5%
-5.2%
2.7%
10.1%
Original Air California logo, used from 1967 to 1977Air California 737-200 in 1980
In April 1967, Air California was operating 48 nonstop Lockheed L-188 Electra propjet flights a week from Orange County (SNA) to San Francisco (SFO). The fare was $14.85 plus 5% tax. It added Orange County (SNA) to San Jose (SJC) and Oakland (OAK) flights around the beginning of 1968.
By May 1968, the airline was operating 92 flights per week from SNA to SFO, primarily using Douglas DC-9-10 twin jets, as well as 50 flights a week from SNA to SJC, with most continuing on to OAK. By January 1969, Boeing 737s had taken over all flights, with the Electras and DC-9s being removed from the fleet.[citation needed]
PSA bid for Air California twice, in 1969[14] and in 1972. In the first bid, PSA withdrew from negotiations in May 1970[15], but in July 1972 it concluded a merger contract with Air California. The CPUC approved the merger, but it was blocked by the United States Department of Justice on anti-trust grounds.[16] For instance, the combination would have had an 81% market share on the Los Angeles Basin to San Francisco Bay market and even higher market shares on individual submarkets.[17]. Incidentally, those kinds of market shares show how successful were the California intrastate carriers in driving off the far larger CAB-regulated carriers pre-deregulation.
By 1976, Air California was operating nonstop intrastate jet service between Orange County and San Francisco, San Jose, Oakland, Sacramento, San Diego and Palm Springs; between San Diego and Oakland and San Jose; between Ontario and Oakland and San Jose; and between Palm Springs and San Francisco, San Jose and Oakland.[18]
In the late 1970s, Air California's fleet was composed mainly of Boeing 737-200 jetliners. Two Boeing 737-100s were added in 1977–1978. It also flew two Douglas DC-9-10s in 1968, which were leased while Air California was awaiting its new 737s.
In 1975, Air California resumed flying Lockheed Electra propjets in order to serve Lake Tahoe Airport since this airfield had banned scheduled passenger airline jet flights, a ban lasting until the early 1980s. The Electras were retired again when Air California dropped Lake Tahoe as a destination in 1979, with the airline then becoming an all-jet air carrier.
In the early to mid-1970s, Air California offered school field trips for inner-city school children in Los Angeles to Sacramento at $25 (equivalent to US$148 in 2022) per ticket. The school children would be taken on a tour of the California State Capitol, Governor's Mansion, and Sutter's Fort.
When the airline introduced the new McDonnell Douglas MD-80, one could (for several hours at Burbank Airport) purchase discounted one-way passes (good for one year) for flights to San Jose and Oakland. The pass price was $9.80 one way/$19.60 round trip, with a purchase limit of four round-trip passes. Later that year, San Francisco was added to the pass program as well.
Following the federal Airline Deregulation Act of 1978, Air California started flights to Las Vegas and Reno, its first routes outside of the state. It then offered service to Portland, Oregon, and then Seattle, Washington, and Phoenix, Arizona. The growing airline then became a takeover target for larger, national air carriers.
In 1981 Air California's owner Westgate, undergoing bankruptcy proceedings, agreed to sell Air California to a newly formed company, AirCal Investments, owned by real estate developers William Lyon and George Argyros, for 61.5 million.[19] The airline changed its name to AirCal and adopted a bright new logo and image, including a new wardrobe for its employees by fashion designer Mary McFadden.
During the 1980s, AirCal had a small fleet of Boeing 737s (series -100, -200 and -300 aircraft); seven McDonnell DouglasMD-80s; and six British AerospaceBAe 146-200s. The BAe 146 allowed AirCal to increase flights at noise-sensitive Orange County Airport since this British-built jet was quieter than other jets. The airline recommenced flights to Lake Tahoe in the early 1980s with jet service, first with MD-80s and later with Boeing 737-300s. In early 1985, the airline was operating nonstop MD-80 jet service between Lake Tahoe and Los Angeles (LAX), San Francisco (SFO), and San Jose (SJC).[20]
By May 1986, AirCal had introduced new flights serving Chicago (ORD), Anchorage (ANC), and its only international destination, Vancouver, British Columbia, Canada (YVR).
AirCal alliance with Muse Air
In 1984, AirCal partnered with Texas-based Muse Air. Connecting flights between the two airlines were published in their respective timetables.
The AirCal January 1, 1984, system timetable listed connections to Muse Air flights from Los Angeles (LAX) and Ontario (ONT) to Austin (AUS), Houston Hobby Airport (HOU), Midland/Odessa (MAF), and New Orleans (MSY).[21] The April 29, 1984, Muse Air system timetable listed AirCal connections from Los Angeles (LAX) to San Francisco (SFO), Oakland (OAK), San Jose (SJC), Sacramento (SMF), Reno (RNO), Portland (PDX), and Seattle (SEA).[22]
AirCal was acquired by AMR Corp., the parent company of American Airlines, in 1987.[6] American continued to fly many former AirCal Boeing 737s as well as the BAe 146s, which at that time were both new types in American's fleet.
American continued to operate former AirCal Boeing 737-300s into Lake Tahoe (TVL) until it turned over all Lake Tahoe service to their regional affiliate American Eagle, which was operating small, commuter turboprop aircraft at that time.
All eight former AirCal Boeing 737-3A4s were later operated by Southwest Airlines. AirCal also had ordered a ninth 737-3A4 (never delivered), which eventually also found its way into the Southwest Airlines fleet. As of April 2017, Southwest had retired all of the former AirCal fleet: N679AA, the last Boeing 737-300 in service, was stored in February 2012.[23]
Incidents and accidents
In 1981, an AirCal Boeing 737-200 crashed while attempting to land at John Wayne International Airport around sunset on Tuesday, February 17.[24][25] AirCal Flight 336 was a scheduled flight from San Jose International Airport to John Wayne International Airport. Around 48 minutes into the flight, the crew received clearance for a visual approach to land on runway 19R. As Flight 336 was approaching, another AirCal flight, Flight 931, received clearance to take off from runway 19R.
The controller recognized the potential danger of a collision between the two aircraft and ordered Flight 931 to abort takeoff and instructed Flight 336 to go around. Flight 931 aborted its takeoff, however, Flight 336 did not go around and instead landed on the runway with the landing gear retracted. The aircraft left the runway surface around 900 feet (275 m) past the runway threshold, skidded another 1,170 feet (360 m) before finally coming to rest 115 feet (35 m) to the right of the centerline. All passengers and crew members survived the crash. The Boeing 737-293 aircraft, registered N468AC, was damaged beyond repair and consequently written off.[26]
On June 5, 1986, an AirCal 737 flying from Los Angeles to Portland came within 100 feet of a private plane before the AirCal pilot banked to avoid a collision. No crew or passengers were injured during the incident.[27]
Destinations
Destinations in May 1987
AirCal's May 1, 1987, system timetable listed the following destinations shortly before it was merged into American Airlines:[1]
