Pan Am clipper, Vol. 2, No. 6, September 1976

              September
Volume 2 Number 6
... Into the homestretch
Don’t miss the boat! Operation Homestretch is full speed ahead for the final quarter of 1976.
Starting the middle of the month, Marketing and Services employees can win valuable prizes for helping increase Pan Am’s revenues in the “homestretch,” the last four months of the year.
Each week during that time, prizes will be awarded to employees—or teams of employees—for top contributions in each of seven categories: bringing in new business; taking business away from the competition; better baggage delivery; good on-time departure performance; telephone answering efficiency; prompt and accurate check-in performance and exemplary inflight performance.
Who decides if you should be considered for such an award?
You do ... by filling in an entry form and submitting it to your manager. Final decisions each week will be made by the Divisional Vice President. Prizes include a Seth Thomas Helmsman Clock or a comparable gift worth up to $200.
From the weekly winners, Senior Vice President Dan Colussy will choose seven grand prize winners—either individuals or a team—who, in addition to receiving an AMF Puffer Sloop Sailboat or comparable gift worth up to $1,500, will be flown to New York to be honored by Chairman
Okinawa,Taipei
service
suspended
Supreme Court Chief Justice Warren Burger denied a request for a stay of a lower court ruling that Pan Am suspend services at Okinawa and Taipei, and operations were halted at both points as of Aug. 30.
The suspension results from a U.S. Circuit Court of Appeals ruling that overturned Civil Aeronautics Board approval of the Pan Am-Trans World Airline route swap. A subsequent CAB request for an extension in order to hold expedited hearings in the case was granted, except for the portion of the route exchange involving Okinawa and Taipei.
Both Pan Am and TWA had asked the Supreme Court for a stay of that order.
Employees protest TRP Decision
By Bryce B. Miller
Enraged Pan Am employees were flexing their collective political muscle last month in a fight to convince President Ford the Civil Aeronautics Board majority decision in the Transatlantic Route Proceeding was a bad one.
They were working through Congressional leaders in face-to-face appeals and in letters urging them to intervene on Pan Am’s behalf with the President. They were sending messages straight to the White House, too— through consulates and embassies overseas, by mail in the U.S.
And they were getting action.
Byron Wong, San Francisco employee cafeteria cashier, wasn’t sure how to write his protest letter. Ed Lowery of the SFO Awareness Committee advised: “No matter how sore we are, make the letters to the government as constructive as possible.”
California Congressman Paul N. McCloskey Jr. walked off the jetliner from Kansas City. He and his aide Kristen Arnold were returning from the Republican National Convention. They expected to be met. And they were.
Fernando Vega of Pan Am technical-operations approached and shook their hands.
“Mr. Congressman,” Vega said. “Welcome back to San Francisco. It’s good of you to give us your time.”
Seawell and President Wiser at a dinner.
Colussy says, “It’s all part of our drive to increase revenues during the last quarter of 1976. More than ever, we need the involvement of each employee. We’re hoping “Operation Homestretch” will be just one more reminder of that fact.”
In addition to the weekly prizes, hundreds of merit prizes will be awarded for outstanding contrbu-tions to Pan Am.
Details of the program in the individual divisions will be announced during the month.
Pan Am’s position supported by public
NA Division announces new commission plan
Pan Am announced a new incentive commission of2 percent for retail travel agents in the continental U.S., Hawaii and Alaska who increase high yield First and standard Economy Class business.
The new commission, in effect from Sept. 1 to Dec. 31, is in addition to the regular 8 percent and 3 percent inclusive tour commission now given agents.
Walt Elsaesser, Divisional Vice President-North America, said the plan, which also includes incentives for employees selling the program to agents, is part of a system-wide Marketing and Services Program, “Operation Homestretch, ” designed to increase revenues during the last four months of the year.
Elsaesser said the additional 2 percent is awarded agents on all their Pan Am business when their first and economy class monthly flown revenue reaches a level either $600 or 10 percent (whichever is greater) above their average monthly flown revenue for the second quarter 1976.
Pan Am has received considerable editorial support from major newspapers and magazines in its protest of the recent Civil Aeronautics Board recommendations in the Transatlantic Route Proceeding.
Business Week said “the only part of the report that makes sense is the strong dissenting opinion of Chairman John Robson.” The magazine urged President Ford, who must act on the CAB recommendation, to “take his cue from the Robson dissent.”
The Washington Post said the recommendation of two more airlines—Delta and Northwest—to fly the North Atlantic was “like carrying coals to Newcastle.” It went on to say that the “last thing the international airline business needs just now is more carriers flying on those routes, and the last thing the two major international
Debenture offer contemplated
Pan Am has filed a registration statement with the Securities and Exchange Commission in connection with its contemplated public offering of $50 million of convertible subordinated debentures due Sept. 15, 2001.
The offering price, interest rate, conversion price, and other terms of the debentures will be determined shortly before the offering.
The net proceeds from the sale of the new debentures will be added to Pan Am’s general funds and, together with internally generated funds, will be used for general corporate purposes, including work-Continued on page 3
American airlines (Pan Am and TWA) need is more competition.”
A Los Angeles Herald Examiner editorial entitled “Heads in the Clouds,” called the recommendations “typical of the CAB’s disregard of the overall U.S. airline industry.” It pointed to Pan Am as one of the most “notable examples of an air carrier victimized by bureaucracy.” The newspaper said that it is time for the government to consider revamping the CAB “before the government does to the American airline industry what it did to the passenger train industry. If air regulation is the established policy, let the government at least regulate with fairness to all airlines,” it said.
Syndicated Columnist James J. Kilpatrick said in a commentary aired on Washington Post/Newsweek stations that the decisions “make no sense at all. They do not serve the public, and they may fatally damage Pan Am.”
Kilpatrick went on to call the recommendations “nonsense— worse than nonsense. The board’s decisions ought to be suspended and the Board’s cumbersome, restrictive procedures must be drastically revised,” he said.
The Arizona Republic commented: “If Pan Am ever collapses, or becomes a socialized ward of the American government, one need only to go to the CAB’s record books to find out why.”
Second of two installments of an interview with Senior Vice President-Marketing and Services Dan Colussy appears in this issue, page 6.
Vega, who also is a city councilman in suburban Redwood City, knew McCloskey personally and had invited him to meet with the local Pan Am Employee Awareness Committee. The Congressman agreed. It was his first official item of business following the convention.
For Pan Am’s position irt the Transatlantic Route Proceeding, see Washington Report, page 2
Quickly, they collected McClos-key’s car and drove to Pan Am facilities where the Aware committee has its offices.
Gathered in the office were Committee Chairman Bob Knight, Co-chairman Bob Williams, IBT Shop Steward Mel Fountain, Ed Glen, a 747 first officer, and Mrs. Fran Saeger whose husband works in the radio shop.
“I’m getting a lot of letters and telegrams from Pan Am employees in California,” McCloskey said. “Some of them’ are pretty emotional, and there is little solid information.”
“We’re here to give you solid information,” Knight said. “And I can understand the emotion. Pan Am is more than just a job, it’s an institution.”
For the next 30 minutes, the group briefed the Congressman on the CAB decision, why they felt it was unfair and potentially disaster-ous to Pan Am, and why they felt
Continued on page 2
July profit
Pan Am reported a net income for July of $17.9 million, compared with a restated $19.2 million net income for July 1975. $17.9 million profit is after income taxes of $4.6 million and extraordinary income of $4.5 million, primarily the gain after taxes on the exchange of Pan Am’s new subordinated debentures due in 1996 and 1999 for part of the company’s convertible subordinated debentures due in 1986 and 1989.
Operating profit for fhe month was $23.5 million compared with $19.5 million for the same month last year, an increase of 20.5 percent. Operating revenues increased 5.3 percent while operating expenses were up 3.2 percent.
For the first seven months of the year, net income was $68 million Continued on page 3