Clipper, Vol. 23, No. 1, January 3, 1972

              temper optimism with realism/ Halaby advises
Optimism tempered with realism.
That’s the outlook employees should have as they buckle down to the business of 1972 after completing “one of the most difficult years in Pan American’s history,” Chairman Najeeb E. Halaby said recently on Pan Am Line.
“We’ve accomplished a lot together,” he said, “and as the old year ends we can face new problems with a sense of renewal, of optimism-—but realism.
“We know we can do it [but] we know there will be strain and struggle and some sacrifice to overcome the recent past and to master the future.” His confidence, he explained, comes from watching what employees were able to do in 1971, after Pan Am had reported a loss of $47.9 million for 1970.
could have but didn’t
Halaby said that 1971 was a year when “many people could have been tempted to stop trying, to engage in a lot of wasteful worry, to start blaming all our problems on others. But, what has happened is' quite different. Throughout the organization fewer total employees have gotten more and better work done, and an improved attitude of pulling together in a common cause has made our service product one of the best in the industry.”
devalued dollar boon to travel
The impact of the devaluation of the dollar in increased costs for travel abroad will be minor compared with the stimulus to travel which should result from improvements in the U.S. economy, Pan Am has announced.
An upward adjustment in international air fares will probably be necessary to bring prices in dollars in line with other currencies. However, even with this adjustment, transatlantic fares will be lower next year since fare reductions effective January 15 and April 1, 1972 were recently voted. Ground costs abroad should be only $2 to $3 more per day per traveler, based on an average daily expenditure of $25-35, Pan Am said.
between Chicago and London
pax service cut
Chicago—The decision to suspend daily Chicago-London passenger service was made reluctantly, Pan Am has announced.
The temporary suspension which began on Dec. 10, 1971, resulted from a discussion between the British and U.S. governments on a need for reducing capacity primarily in the Chicago-London and Washington-London markets.
Pan Am said the decision to suspend passenger service followed the evaluation of several alternatives and noted that the airline still offers nine weekly all-cargo flights between Chicago and Europe.
Passenger service from Portland and Seattle to London, formerly provided daily via Chicago, is being operated three times a week non-stop from Seattle.
Chicago-based cabin attendants have been working Europe-bound flights from other cities, said Frank L. Lennon, senior director-flight service operations.
Concorde: more than price
Price is only part of the picture Pan Am has to revue before deciding what to do about its eight options on the British-French SST Concorde, says Chairman Najeeb E. Halaby: “The price of the Concorde is important but its operating costs, dependability and social acceptability are more so.”
clipper
Vol. 23, No. 1, January 3, 1972
Pan Am has reported a net loss of $23,346,000 or 61 cents a share for the first 11 months of 1971. This compares with a loss of $27,019,000 or 77 cents a share for the same period in 1970.
Net loss for November was $10,969,000 or 27 cents a share, compared with a net loss of $17,021,-000 or 48 cents a share in November 1970. The November loss, ah expected, ended Pan Am s string of four straight months of profit.
In only three out of the past 10 years has Pan Am recorded a net income for November, a seasonably depressed month. Last profit was one of $476,-000 in 1967.
Total operating revenues for the eleven months were $1,086,306,000 compared with $1,039,194,000 in 1970, up 4.5 percent. Operating expenses were $1,076,947,000, up 2.8 percent from $1,047,754,000 in 1970.
November 1971 operating revenues were $87,-058,000, up 13.9 percent from 1970, while operating expenses of $97,999,000 in November were up only 2.7 percent from the prior year.
Washington, D.C.—Citing losses of $17.9 million in its operations between the northeastern U.S. and San Juan and the Virgin Islands in the year ended September 30, 1971, Pan Am has filed with the Civil Aeronautics Board for increases of up to around nine percent for these services effective Feb. 1.
The proposal would increase the New York/San Juan thrift class midweek fare to $78 from $71 for day flights, to $62 from $57 for night flights and to $131 from $120 for first class.
Pan Am pointed out in the filing that the new fares would still yield 3.88 cents to 5.20 cents a mile on New York/San Juan thrift service, yields that are well under those for comparable domestic flights.
In addition to its proposed fare revisions, Pan Am, with the support of American and Eastern, which also fly this route, has petitioned the CAB for permission to discuss reducing capacity in the market to increase seat factors.
Under the proposal, economy fares between St. Thomas and St. Croix and New York, Baltimore, Philadelphia, or Washington would rise to $106 from $97; and to Boston, to $128 from $121.10.
World’s largest terminal. A Boeing 720B jet parked at Pan Am’s new $70 million terminal at JFK is dwarfted by a pair of 747s. Three gates in the new terminal are now in operation. When completed next June, the terminal will have gate positions for six 747s plus positions for ten 707 or 727 jets as well as its own Customs center.
loss trimmed 16t per share
higher fares asked to Caribbean where loss totalled $17.9 million
by Jay Beau-Seigneur
Net loss for the first 11 months is after payments and accruals made under the mutual assistance agreement totaling $1,454,000 after taxes, compared with $5,910,000 for the same period last year. Capital gains, after taxes, for the first 11 months of 1971 were $837,000, compared to $3,838,000 for the same period last year.
The year-to-date loss was also reduced by a reversal of expense totaling $6,555,000 (after applicable taxes of $2,070,000) or 17 cents per share, representing the previously amortized portion of a $15 million U.S. Supersonic Transport research and development expenditure recently refunded to Pan Am by the U.S. Government.
After eliminating the effect of the reversal of the expense for the U.S. Supersonic Transport refund, and airline mutual assistance and capital gains and losses for both years, net loss for the eleven months was 29,284,000 compared with a loss of $24,947,-000 for the same period 1970.
| cargo rates wait
by Bill Moore
Air cargo rates for the North Atltntic are somewhat up in the air at the moment due to a negative vote by British Overseas Airways Corp. on a new Internatinoal Air Transport Assn, rate package.
The new package was endorsed by everyone but BO AC when 20 North Atlantic cargo carriers last met under the auspices of IATA. At that time, however, BOAC asked time to review the matter. Then, on the Dec. 15 deadline, BOAC voted against the agreement. This automatically tabled the entire cargo rates package since a unanimous vote is required to pass any IATA agreement.
working on a compromise
At this point, efforts are being made through IATA channels to work out areas of disagreement. When this is done, an unanimous agreement is expected which would increase cargo rates overall from six to eight percent to produce a yield more in line with costs of operations. Also expected is a reduction in container rates to encourage shippers to use unit load devices.