The worst aviation disaster to date in America occurred September 4 when an Alaska Airline Boeing 727 jet crashed into a mountain 20 miles west of Juneau, killing all 111 people aboard. Subsequent investigation indicated that reception of misleading navigation information led the crew to descend prematurely, though the origin or nature of that information was not determined. The Juneau Municipal Airport put a DME (Distance Measuring Equipment) Navigation Aid into operation. It would let the pilots know their exact distance to the runway, improving safety in poor weather. The federal Civil Aeronautics Board (CAB) ruled that Western Airlines suspend service to Juneau, leaving Alaska Airlines with a local monopoly for jet service. Area residents and local government officials alike began a petition effort to appeal the ruling. Increasing costs with an aging slow fleet and increased competition from more efficient tug and barge outfits forced the Alaska Steamship Company to cease operations in January.

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Bartlett Memorial Hospital (with 67 beds) opened near Salmon Creek, three miles north of downtown. The rock dump was selected as the location for sewage treatment plant. Glacier Highway extended out to Echo Cove in anticipation for construction there of a large pulp mill by U.S. Champion Paper (which was never built).
Gary Hedges won the Golden North Salmon Derby with a 59 lb. 8 oz. king salmon (largest winning fish on record for the derby). Eight Native residents from Gambell, St. Lawrence Island journeyed to Juneau in March to cover a 37 foot wooden frame umiak, a traditional hand-crafted vessel, in the state museum, which had been acquired several year earlier from the northwest village of Wales. The visitors brought four female walrus skins and sinew to stretch and cover it in a time-tested procedure. School classes and hundreds of area residents were able to view their work and enjoy traditional singing and drumming sessions during their week-long stay.