AVIATION: Jets for Fall

American Airlines President C. R. Smith last week made official a report that had skittered through the aviation industry for weeks. He had signed contracts for 50 new medium-range jet planes, thus bringing to no the number of jets slated for delivery to American between October 1958 and the end of 1962—more new equipment than has been ordered by any other airline in the world. Smith also sprang a new financing idea for planes: instead of buying the jet engines for the planes, the line will lease them from the manufacturers, save itself $80 million in initial cost.

What is even more unusual is that Smith has the money to pay for his $365 million worth of new planes. American has arranged for loans of $135 million from Metropolitan Life Insurance Co. and Prudential Insurance. With the savings effected by the engine leasing (American can later buy the engines if it wants to), plus plowed-back earnings, Smith does not expect to have to raise another penny.

In the new orders 25 of the planes will be a new type, the Convair 600, designed specifically by General Dynamics' Convair Division to meet Smith's demanding requirements. The 600 is expected to be the fastest jet (cruising speed: 635 m.p.h.) on the commercial airways when it gets into the air in 1961. The other 25 planes just ordered will be smaller, lighter versions of Boeing's transcontinental 707. They will cruise at 601 m.p.h., have a range of 1,850 miles, go into service in 1960. Previously ordered by American: 25 long-haul Boeing 707s, 35 short-to-medium-range Lockheed Electra turboprops.

American, the largest domestic carrier, will also be the first with pure jets aloft. It will have five or six 707s in operation by year's end, starting on the New York-to-Los Angeles run (time: 5½ hours westbound, 4½ eastbound).