To Our Stockholders:
Fiscal year 1989 will stand out as a year of major transition for Braniff, Inc. In June 1988, majority interest
in Braniff was acquired by BIA-COR Holdings, and Braniff became a subsidiary of BIA-COR. One of BIA-
COR's first actions upon the acquisition of control of Braniff was in the installation of a new senior management
team. It was my privilege to accept the position of Chairman of the Board, President and Chief Executive
Officer in conjunction with these changes.
I was joined by two experienced industry executives, W. Howard Mackinnon, Executive Vice President and
Chief Financial Officer, and Richard L. James, Executive Vice President - Planning.
In this competitive industry an airline must have certain assets to thrive in the long term.
We have, with the vital support of our parent company, BIA-COR Holdings, acquired many of these
needed assets over the past year.
In December, Braniff consumated a transaction arranged by CoreLeasing, an affiliate of BIA-COR Holdings,
in which Braniff ordered 50 Airbus Instrustrie A-320 twinjet aircraft, and acquired options for 50 more. The
A-320 will be powered by International Aero Engines V2500 engines, the most fuel efficient and quiet engines
in service today. The A-320 is the world's most advanced airliner and includes a computer assisted flight
As part of the A-320 transaction, CoreLeasing arranged financing for 42 of the first 50 aircraft.
The first A-320 will be delivered to Braniff in July and will enter passenger service in August. A total of 10
will be delivered this year.
Braniff's A-320 transaction was honored earlier this year by Air Finance Journal, with its prestigious "Deal
of the Year" award.
Our growing Kansas City hub offers travelers 93 daily jet departures, with service to 34 nonstop
destinations, up from 50 daily departures and 22 nonstop destinations in June. As of July 1, our Orlando
hub will offer 31 daily jet departures, with service to 14 nonstop destinations.
Supporting these services is a strong marketing program built around the Braniff Guarantee, our improved
Get-It-All Frequent Flyer Program and our Bottom Line Program for corporate travel.
Our employees are eager to restore Braniff to its historic position of service leadership. We have negotiated
new contracts with our agent and clerical force, pilots, and flight dispatchers. This favorable trend gives us
confidence that we will conclude negotiations with our flight attendants promptly.
On May 8, Braniff occupied its interim headquarters building in Orlando, Florida. This will significantly
increase Braniff's customer awareness in the fastest growing urban area of the United States, Central Florida.
On January 31, the operations of Florida Express Airlines, acquired by Braniff in April of 1988, and Braniff
were merged under a single certificate. This promises us greater operating efficiencies.
We experienced a net loss of $24.6 million on revenues of $437.1 million for the fiscal year ended January
31, 1989, compared to a net loss of $12.2 million on revenues of $252.4 million for the fiscal year ended
January 31, 1988. Despite offering 34.9 percent more capacity in available seat miles year over year, our load
factor remained relatively stable at 64.3 percent compared to 65.6 percent a year earlier, when Braniff
specialized as a low fare competitor.
$23.6 million of Braniff's loss was attributable to the results of our Florida Express subsidiary. The former
operations of Florida Express continue to incur substantial losses because of the inefficiency of the
BAC 1-11 fleet acquired from Florida Express.
The company plans to remove the BAC 1-11's from scheduled service within the next year.
Today, Braniff has a more sharply focused vision of its role. We are in a transition mode, acquiring and
putting int place major assets. I believe this mode will reach fruition during the coming peak travel season in
the summer of 1989.
We have assembled a highly-skilled management team to meet the challenges associated with this transition
and in the years to come. I look forward to a strong, profitable Braniff, with a modern fleet and a strong
route system built primarily around our two major air service hubs in Orlando and Kansas City.
William G. McGee
Chairman, President and
Chief Executive Officer