BUSINESS

CP Air flies in an heir apparent

MALCOLM GRAY November 8 1982
BUSINESS

CP Air flies in an heir apparent

MALCOLM GRAY November 8 1982

CP Air flies in an heir apparent

BUSINESS

It is not a propitious time to step into the presidency of a major Canadian airline—or any airline for that matter. Profits in the Canadian industry have plunged from $112 million in 1980 to a predicted deficit of $100 million this year. But last week Dan Colussy, the 51year-old onetime president of Pan American World Airways, picked up what some consider to be a formidable gauntlet. Vancouver-based CP Air, currently in a cost-cutting campaign because of losses that totalled $30.3 million in the first half of 1982, announced that Colussy will take over from Ian Gray as president and head of operations on Nov. 15. More significantly, the American executive is already being touted as the successor to Gray’s mantle as chief executive officer of the $l-billion airline within three years.

For now, as president of the airline, Colussy will have more than enough problems to handle. Faced with con-

After a continent-wide search, the new president is an American whose most recent venture did not fly

stricting business, the Canadian Pacific Ltd. subsidiary is being forced to trim its payroll. By January, 1983, the work force will have shrunk below 8,000 employees, from 8,800 a year earlier. The airline is still determined to compete with much larger Air Canada on coastto-coast service. In fact, CP Air is locked in a discount-fare war with its Crownowned rival as well as with the smaller charter company Wardair International. The current battle began on Sept. 15, when the two scheduled airlines announced a new package of full discount flights to compete with Wardair’s. But, at the same time, CP Air has cut some flights, sold off three aircraft, and grounded six of its medium-range fuelguzzling DC-8s a year earlier than planned. In addition, it has postponed delivery of four new wide-body Boeing 767s until early 1985. Says Gray: “We are in the middle of a fleet-modernization program but, as well, we are tightening our belts to weather the recession.” Still, the tall, Harvard-trained Colussy is no stranger to adversity. He left Pan Am after 11 years of service, in 1981, at a time when the U.S. giant was absorbing heavy losses and

selling off its hotel holdings in a bid to keep flying. Then he tried to start Columbia Air, a regional airline based in Baltimore, Md., that would have flown to 30 U.S. cities. The plan was shelved last June when Colussy could not raise the necessary capital. The timing was fortuitous, however, because Colussy became available shortly before CP Air launched a continent-wide search for a successor to Gray, who, at 62, is less than three years from retirement.

The company is somewhat sensitive about hiring an American to watch over its bright orange planes, but officials

insist that they looked hard for a suitable Canadian before deciding on Colussy, a man who has been in the airline business since he joined General Electric’s jet engine division in 1956. “Hell, William Van Horne was an American and he didn’t do a bad job of running Canadian Pacific Railway,” said company spokesman James McKeachie. As for Colussy, he was in Vancouver last week, house hunting and learning about the problems of CP Air firsthand before he starts making pronouncements on how to fix them.

MALCOLM GRAY