Airline Mergers Affect Magazine Publisher
The frenzy of airline mergers has been a mixed blessing for East/West Network, a company that publishes a number of in-flight magazines. True, East/West has lost some magazines as a result of the consolidations. On the other hand, it has gained circulation overall--to a current 1.9 million monthly from 1.8 million last year, largely because there are so many more travelers. And that means more advertising dollars. Advertising rates are up 22% from last year.
“You win some and you lose some,” said James A. Kennedy, a consultant to the company, which has offices in both Los Angeles and New York. “In the fiscal year ending Oct. 31, we had revenues of $2 million higher than a year earlier. We do not look for a decline in revenues this (fiscal) year. We will hold our own.”
When Western Airlines, whose Western’s World it printed, merged with Delta Air Lines, whose publication, Sky, was edited by a competitor, East/West lost the Western publication, which had a circulation of 115,000 monthly. The rates for a full-page, four-color ad in Western’s publication was $7,000, and the magazine carried between 40 and 50 pages a month. The company had to furlough several employees, including the editor and art director.
When Frontier Airlines went bankrupt last year, East/West was stuck with 60,000 copies of the September issue, which it had already completed. Advertisers were compensated in other East/West publications. (Due to the consolidations, East/West’s staff in Los Angeles now totals about 48, compared to 65 last year.)
Northwest Airlines and Republic Airlines merged last year, and East/West had published both of their publications. Republic’s magazine had a monthly circulation of 180,000 while Northwest’s was 170,000. The publishers melded Republic into Northwest and simply put out 350,000 of the Northwest magazine, charging the corresponding higher advertising rates. An independent research company has found that each magazine has an average of 6.5 readers.
The enlarged Northwest magazine lost a few “local” advertisers who had put their dollars into Republic’s publication and were “not interested in international reach--a public which travels to Tokyo, Osaka, Shannon and Stockholm,” some of Northwest’s destination, according to Kennedy.
East/West had also published the magazines of Trans World Airlines and Ozark Airlines, two other merger partners. It now publishes a separate TWA Ambassador edition with the same editorial content but different advertisements for passengers flying out of Ozark’s old major hub city, St. Louis. The local rates are lower.
When UAL Inc., the parent company of United Airlines, announced that it was changing its name to Allegis Corp., it also wanted to improve the image of its magazine, United. The name was changed to Vis a Vis and the content was improved, adding short stories and new upscale advertising. Rates for a full-page, four-color ad were boosted to $24,700 from $21,000.
But UAL, which owns Hertz Rent-a-Car, Westin Hotels and Hilton International Hotels, prohibited ads of competing companies such as Avis and Sheraton. East/West hopes to pick up new upscale advertisers to compensate.
The company publishes the Review magazine of Eastern Airlines but not that of Continental Airlines. Both carriers are now owned by Texas Air Corp. Kennedy says the company hopes that the two publications will be consolidated, adding that East/West has been asked to bid for a chance to publish Continental’s magazine. It also publishes PSA’s magazine, but that carrier will soon merge with USAir, whose magazine it does not publish. It plans to bid on the USAir title, however.
“With every merger,” says Kennedy, “there’s a chance to lose a magazine or an opportunity to pick up a new one. That’s business.”
