History
After many years of discussions and frustrated efforts, on July 1, 1968 Bonanza Airlines of Phoenix, San Francisco’s Pacific Air Lines, and West Coast Airlines of Seattle finally merged, combining their adjacent route systems into a vast network stretching from Canada to Mexico. The Douglas DC-9 and Fairchild F-27 fleets were highly compatible, and the three systems fit together on the map with minimal overlap. The vision presented to regulators and business investors was that the three regions would consolidate traffic and achieve efficient and profitable flow (and significantly reduce government subsidy payments) across the entire western U.S. by removing redundancies and unlocking high-traffic corridors between stations where Air West was well-established, such as Los Angeles, San Francisco, Portland, Seattle, Phoenix, Las Vegas, and Salt Lake City.
Leadership of Air West was equitably balanced with West Coast’s Nick Bez as chairman and Bonanza’s Edmund Converse as vice-chairman. President of the new company was E. Robert Henry from Pacific.
However, the new Air West would face several internal challenges as hoped-for savings from the merger were much more difficult to achieve than touted – each carrier had its own headquarters, sales, and maintenance divisions, so deciding how to blend and reduce the duplicate staff and allocate functions across the territories would take some time and negotiation. Pacific’s San Francisco offices would serve as corporate HQ, while Bonanza’s Phoenix hangars would function as the primary engineering base. A new reservations computer system designed to replace each carrier’s previous processes and align with current standards failed its implementation. Route authorities and frequencies granted by the Civil Aeronautics Board (CAB) made it difficult to flow aircraft across the three regions and offer through-flights. Aircraft and airport facilities needed to be repainted and given new signage; uniforms had to be changed out entirely, and a big advertising program was undertaken across the entire West to introduce travelers and shippers to the new name. And the three former chief executives’ egos did not gel, adding unwanted drama.
The Piper Navajos and Douglas DC-3s still operating at West Coast had to be removed and sold off; Boeing 737 orders from Pacific and DC-9-30 orders from Bonanza were cancelled; and the small 727-100 fleet was eliminated. While this did help increase flying hours for the remaining DC-9 and F-27 aircraft, it did not guarantee seats for each destination would be available when flyers were most interested in departing or arriving, necessitated “hopscotch” routings to connect all the dots, and put too many seats into marginal markets where a small aircraft would have made more sense.
Externally, general inflation was affecting the entire U.S. economy in the late 1960s, driving up airlines’ operating costs – but the CAB was reluctant to allow air fares to rise to cover those costs. Intra-state operations in California on key routes were under heavy fare pressure from rapidly-growing upstarts Pacific Southwest (PSA) and Air California, who were not subject to CAB fare, route, or frequency rules as their services did not leave the state’s borders. Air West ended up losing $20 million in 1968.
Morale and bookings were slipping; and rumors swirled around the system that Nick Bez was shopping the carrier for a takeover. The rumors were true – and Bez had not consulted with his fellow executives before contacting potential buyers. Multiple carriers and investors were contacted, including Northwest Airlines. Northwest put together a stock-swap deal in December 1968 that was ultimately rejected by Air West’s investors.
Billionaire industrialist, famed aviator, and former owner of Trans World Airlines, Howard Hughes, would be the victor, gaining shareholder approval on December 31, 1968 and receiving government sign-off in April 1969. All top-level management who had been leadership at Bonanza, Pacific, or West Coast left the company at that point.
Results in 1969 were no better. Hughes’ holding company set up to execute the purchase, Summa Corporation, brought in new management, such as Irving Tague, with experience at Pan Am and Northeast, and Russ Stephenson, former CEO of Mohawk Airlines. Financing was secured so that staff could earnestly begin to transform the carrier and think about expansion. And the company’s name was altered to Hughes Airwest (airline code RW).
On June 6, 1971, a Hughes DC-9 was destroyed in a midair collision with a U.S. Marine Corps F-4B fighter jet over the San Gabriel Mountains northeast of Los Angeles, killing all five crew and 44 passengers. RW management used the crisis as an opportunity to rebrand, introducing its signature banana-yellow fuselage and tail, Sundance Yellow uniforms, and innovative marketing touting the “Top Banana.” A new headquarters building was constructed in San Mateo in 1974, new Boeing 727-200 jets were ordered and additional DC-9s were acquired. Fairchild F-27 turboprops began to be phased out (although it would take until 1980 for the last to be sold off).
Slow work on casting off routes to smaller communities, boosting flights between the regions, and steady increases in service to Canada and Mexico gradually brought improvements in profitability, aided by Hughes’ ability to secure consistent funding. Interchange service with Frontier extended RW’s network to Denver, and “connecting the dots” nonstops gradually started to be added, such as Los Angeles to Arcata/Eureka, CA, Eugene, OR, and Calgary, AB. Seasonal service to ski destinations such as Sun Valley, ID and Kalispell, MT and a new route to Manzanillo, Mexico helped broaden its customer base.
Domestic route applications started to be approved, extending the network to Houston, Des Moines, and Milwaukee, with the expectation that further expansion into the Midwest, Texas, and the South would continue.
Hughes’ death in 1976, however, left the airline without a champion, and his Summa Corporation board that took over his businesses lost interest in owning an airline, preferring to concentrate on real estate development (which they still do in the 21st Century.) Equipment orders were halted by 1978 as was further route expansion. Lack of high-level support as the industry was on the edge of Deregulation made Hughes Airwest vulnerable to expanding competitors in its home region such as Air California and PSA in California, Frontier out of Denver, Alaska from Seattle, and national carriers Continental and United.
And routes that had been added just a few years earlier, such as smaller Oregon and Idaho cities to Denver, in expectation that major carriers would provide connecting feed, instead were being counter-programmed by those same major carriers as they built up their Denver hubs. Large swathes of the Hughes network were left flying for no strategic purpose. Also, by the late 1970s, major Hughes markets such as Seattle and Portland still did not have nonstops to other Hughes focus cities like Las Vegas, Phoenix, and Los Angeles.
In addition, the late 1970s fuel crisis and rising interest rates also hurt profitability after a peak in 1977. Labor relations, never a strength for the company, turned sour with a 61-day strike by cabin crew and ticketing agents from September to November 1979. All these factors led to RW posting a loss of nearly $22 million from revenues of over $300 million in 1979.
In Minnesota, the leaders of Republic Airlines – itself the product of a 1979 merger – saw an opportunity to rapidly achieve nationwide coverage and join essentially identical DC-9 and 727 fleets for better economies of scale in purchasing and maintenance. An acquisition was consummated in the fall of 1980 for $38.5 million in cash included the Hughes Airwest assets but also $450 million of debt that Summa Corp. had loaded onto its books.
Republic operated Hughes Airwest as “Republic West” until early 1983 with few changes to routes and frequencies, but eventually determined (after an initial effort to build up a hub at Phoenix) that redeploying the division’s assets eastward in support of the Minneapolis/St. Paul, Detroit, and Memphis hubs would produce better results than fighting fare wars on the West Coast against new and established competitors.
Route Maps
Timetables
Aircraft
Piston-engined Douglas DC-3 aircraft would only briefly fly for Air West; smaller markets across the system were served by the large Fairchild F-27 fleet until those destinations were ultimately cast off.
Jet equipment heavily featured the Douglas DC-9 in its shorter -10 and medium -30 variants; 45 aircraft in this family passed along to Republic with the merger. Three Boeing 727-100 were inherited from Pacific but were quickly disposed of by March 1970. Later, a mix of inherited orders and new commitments for Boeing 727-200 led to deliveries starting in August 1976, and eight of these came over to Republic.
Financial / Annual Reports
While privately-owned by the Hughes Corporation, the airline did not release traditional financial documents. However, some publications provide operational, revenue, or cost detail. If you have additional materials to help us round out this list, please contact us:
- Corporate Profile 1979 (NWAHC collection)
- Corporate Profile 1978 (NWAHC collection, courtesy Blaine Peters)
- Corporate Profile 1977 (NWAHC collection)
- Corporate Profile 1976 (NWAHC collection, courtesy Blaine Peters)
- 1971 Operational Summary (NWAHC collection)
Employee Newsletters
Media
There are several film reels in the NWAHC Archive from Air West and Hughes we have identified as priorities for digitization. We are excited to see how they turn out & look forward to sharing them with you!
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