Pan Am clipper, Vol. 4, No. 3, March 1978

              March
Volume 4 Number 3
Pan Am to ‘bring the world to Houston’
The ‘Fair Fare’ is proposed for U.S. flights
The lowest fares of any scheduled airline were announced last month by Pan Am for new routes it seeks between major cities in the U.S.
Pan Am will offer a standby fare at half the regular coach price and will slash regular coach price by 25 percent, if the Civil Aeronautics Board allows Pan Am to carry passengers in seven domestic markets: New York-Los Angeles; New York-San Francisco; New York-Houston; Miàmi-Los Angeles; Houston-Los Angeles; Houston-San Francisco and Houston-Miami.
Pan Am could cut thè fares because, among other things, the flights will be linking domestic cities as part of international services now operated or planned by Pan Am, Executive Vice President Dan A. Colussy explained at a Washington news briefing. Traffic carried between the U.S. points would be “fill-up” in nature, he noted.
“The new domestic authority we seek would allow Pan Am to expand its intenational services for the U.S. travelling public and at the same time provide needed low-fare services in domestic markets,” Colussy said.
The New York-Los Angeles flight, for example, would provide improved service to points in the Pacific such as Sydney, Melbourne Auckland, Manila, Okinawa and Taipei.
The New York-San Francisco flight would be the first singleairline service to Hong Kong, Singapore, Bangkok, Manila, Sydney, Auckland and Manila.
West Coast to Europe flights, via New York, would offer service to London, Frankfurt, Amsterdam, Tehran, Bahrain, Istanbul and the Middle East.
Continued on page 8
Employees credited with good year
Pan Am reported net income for 1977 of $45 million, compared with a restated loss of $13 million, before extraordinary credits, in 1976.
Commenting on the 1977 results, Chairman Seawell paid tribute to Pan Am employees for their contributions to the good year. “In reporting net income for 1977—our 50th anniversary year—I wish to stress that the dedication and perseverance of our employees, tested so frequently over the difficult years of losses, made possible the excellent results we achieved last year,” he said.
Revenues up 15 percent
The 1977 results were adversely affected by an adjustment of $8.4 million which recorded the effect of capitalizing finance leases. Excluding the adjustment, which had no effect on the company’s
cash flow, the net income would have been $53.4 million.
The restated net income in 1976, after extraordinary credits due principally to an exchange of debentures, was $99.9 million.
With present legislation permitting airlines to fully offset income taxes with available tax credits, no federal income taxes were provided for 1977. However, the 1977 results do provide for foreign, state and local taxes of $6.2 million, while the 1976 period had a net tax credit of $ 1.4 million.
The airline’s total operating revenues increased 15 percent over last year to $1.91 billion, while total operating expenses in 1977 rose 11.8 percent from the previous year. Revenue passenger miles (in scheduled services) increased 9.3 percent, and yield (revenue per passenger per mile) for total scheduled revenue pas-
senger miles was up 8.1 percent
over 1976.
For the fourth quarter of 1977, Pan Am reported a net loss of $9.5 million, as well as a loss of $10 million for December 1977.
For a banker’s view of Pan Am’s and the industry’s financial position, see story, page 8■
Total operating revenues were up 18.1 percent for the fourth quarter while operating expenses rose 20 percent over 1976. For December, total operating revenues were up 18.1 percent and operating expenses for the month rose 26.9 percent over the previous year.
Comparison with similar periods in 1976 is not meaningful because of numerous accounting adjustments made in both 1976 and 1977.
Pan Am plans to develop Houston into a major international transportation hub, with daily low-fare flights to Europe, the Orient and South Pacific, Executive Vice President-Marketing and Services Dan A. Colussy announced last month.
Colussy said Pan Am will inaugurate the first daily 747 service by any airline from Houston to London’s Heathrow Airport, and Round-the-World, effective July 1. “We intend to turn Houston into one of the major U.S. gateway cities on Pan Am’s world-wide route system,” he said.
“We also have applied for new domestic routes in the U.S., with Houston as the hub of low-fare services to San Fancisco, Los Angeles, New York and Miami.”
As a result of the Presidential decision in the Transatlantic Route Proceeding, Colussy pointed out, Pan Am will expand its Houston service to offer passengers and shippers more flights to more overseas destinations than any other airline. He noted that Pan Am’s 747 freighters are already serving both Europe and the Orient from Houston.
“We will be the No. 1 international carrier at Intercontinental Airport—bringing the world to Houston,” Colussy said.
Worldport connections Starting July 1; Flights One and Two, will serve Houston daily with the xmly single-plane flights' to Frankfurt, Tehran and Delhi, as well as the only 747 service to London, via New York.
On the same date, Houstonians will enjoy the first U.S. flag service to Rome, Istanbul, Bahrain and Bombay by immediate and easy connection in Pan Am’s World-port terminal at New York.
Colussy said Pan Am, with Civil Aeronautics Board approval, will also inaugurate on July 1 the first single-airline flights to Tokyo, Hong Kong, Singapore, Bangkok, Sydney, Melbourne, Auckland, Okinawa, Taipei, Manila and Continued on page 6
Congressman Norman Mineta, Democrat from California, recently introduced a bill which would grant U.S. international airlines the right to carry domestic “fill-up” traffic between U.S. cities on international flights. Pan Am strongly supports the legislation. An interview with Mineta appears on page 3.
Pan Am to offer first RTW excursion fare
Round-the-World in 80 days! The first round-the-world excursion fare ever offered by an airline was announced last month by Pan Am. To be called the Round-the-World in 80 Days Fare, it will allow travel from the U.S. to many cities overseas for up to 80 days. Passengers may use Pan Am’s Flights One and Two and certain other Pan Am flights in the Northern Hemisphere.
A.B. “Sky” Magary, Vice President-Passenger Marketing, said the new special fare will be available on a standby basis at an economy'class level of $999 and a first class level of $1,599, a saving of nearly 45 percent off the regular fares. It will also be available on a reserved-seat basis, with unlimited stopovers, at $1,199 economy and $1,899 first class, more than 35
percent off the regular fare.
“Pan Am is uniquely qualified to offer this fare,” Magary said, “both from the standpoint of our global route network and our recent introduction of popular low Budget Fares to Europe and the Orient.” Only Pan Am offers round-the-world service from the U.S., Magary said, noting also that first class accommodations have never before been offered at excursion rates for round-the-world travel.
Various routings
The Round-the-World in 80 Days Fare will be effective from the Continental U.S., Hawaii and Guam beginning March 17, 1978, subject to U.S. government approval.
Many different routings will be available to passengers using the
fare, Magary said. For example, a traveler can begin his Pan Am flight on the West Coast, stopping in Honolulu and Tokyo, continuing to Hong Kong, Tehran, Istanbul, Frankfurt, London and back to San Francisco on a Pan Am polar flight. Or he can travel from the East Coast to Europe, continuing to Delhi, Bangkok, Hong Kong and Tokyo, returning either to the U.S. West Coast or nonstop to New York via Pan Am.
While the Round-the-World in 80 Days Fare will be applicable only on Pan Am flights, travelers may leave a Pan Am flight in one city and pick up a Pan Am flight in another. In between, they may purchase separate tickets for connections by surface transportation or another airline, if they wish. The Continued on page 2