AVIATION: Shake-Up in Colonial

Ever since he took over Colonial Airlines, Inc. 13 years ago, Sigmund Janas has been a big little man in U.S. aviation. As president and controlling stockholder of Colonial, he pushed it up from a pipsqueak line to a sizable airline flying 68 million passenger-miles a year over 3,182 miles of scheduled air lanes. Last week Colonial Airlines, with no explanation, issued a cryptic announcement: Sig Janas was out, and a new president, Alfons Landa, was running the line with the help of a new executive committee. No airman, 53-year-old Landa is a Washington lawyer, who is a director of the American Institute of Management and had done some legal work for the line. Said one Colonial hand: "I nearly dropped my teeth."

The rest of the industry nearly dropped its teeth too when it heard that Janas had resigned as the result of a Civil Aeronautics Board report which charged him with 40 violations of the law and of CAB regulations. Even though Colonial has been in the red for the past five years ($310,000 in 1950), CAB says it "may be shown" that Janas withdrew more than $50,000 of Colonial funds as an advance expense account, and used it to speculate in Canadian currency. "The profits" says CAB, "were retained by Janas." Other CAB charges:

¶ Janas organized subsidiaries such as Canadian Air Express and Airlines Limousine Ltd., never reported his stock ownership in them to CAB.

¶ Janas paid big salaries to some employees who worked for subsidiaries, got kickbacks as high as $150 a month.

¶ Colonial gave free rides and cut rates to unauthorized passengers, appointed the manager of a Bermuda Hotel its agent so it could give the hotel's employees a special rate.

Summed up CAB: Janas "may have falsified Colonial's accounts and reports, may have failed to disclose stock ownership . . . may have failed to obtain approval of interlocking relationships . . . and may have so managed and conducted Colonial's business as not to conform to the standards of honest, economical and efficient management."

Although out as boss, along with vice president A. M. Hudson, Janas remains as consultant and director of the company. Janas agreed not to fight the charges before CAB, said the board, will pay back Colonial $75,000, and will also pay out of his own pocket any fines that might be levied against the company. But he was still not in the clear. CAB turned the report over to the U.S. district attorney in New York.