Pan Am clipper, Vol. 4, No. 5, May 1978

              Regulatory reform passes Senate; awaits House action
The regulatory reform scene in Washington has shifted to the House of Representatives following overwhelming Senate passage by an 83 to 9 vote of the legislation sponsored by Senators Howard Cannon and Edward Kennedy.
The force with which the Senate passed the bill surprised even the most optimistic backers of the legislation. Prior to the Senate tally, Chairman Sea-well sent telegrams to all Senate members urging their support of the bill. And an outpouring of telegrams from Pan Am employees urging their senators to vote for the legislation had an obvious impact.
House action on regulatory reform, however, is expected to run into much rougher sledding than was encountered in the Senate. There have been several bills and numerous amendments taken up by Chairman Glenn Anderson’s House Aviation Subcommittee, but at press time had been agreed upon and reported out of committee. It is anticipated that following the lopsided Senate vote, however, a new House regulatory reform bill will soon surface, probably more closely paralleling the Cannon/Kennedy bill. Just when the House will vote on the matter is difficult to determine.
President Carter strongly praised the Senate action.
Most important to Pan Am, the Senate bill allows U.S. flag carriers to carry local fill-up traffic between all pairs of U.S.
Continued on page 2
MAY ‘78
Volume4 Numbers
Artist s rendering of the Lockheed L-1011-500.
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L-1011-500joins the fleet
Two U.S. carriers to serve LAX-LON
The Civil Aeronautics Board has tentatively selected Los Angeles as the second city, in addition to New York, from which nonstop service to London is authorized by two U.S. airlines. Under the Bermuda II agreement between the United States and the United Kingdom, only two U.S. cities can be served by two U.S. carriers on routes to London.
Pan Am suspended service on the Los Angeles-London route under terms of a route swap agreement with Trans World Airlines which suspended San Francisco-London in turn. Pan Am plans to reenter the market with Los Angeles-London-Amsterdam 747SP service beginning June 15.
Since the selection of Los Angeles means that either Pan Am or TWA must suspend service to London from Boston, the Board tentatively named TWA to serve Boston and Pan Am to operate San Francisco.
The Board took its action at a meeting open to the public on April 19. At press time, the official Board recommendation was being prepared for final Board action.
That recommendation must then go to President Carter for final approval.□
Pan Am’s Engineering and Flight Operations-Technical Departments are buckling down to the important task of working out the final airframe, engine and operating specifications for the newest aircraft that will wear the blue and white livery of Pan Am—the L1011-500.
“There are two busy years a-head,” John G. Borger, Vice President & Chief Engineer, said following the announcement that Pan Am had placed orders for 12 Lockheed L1011-500s fitted with Rolls Royce RB211-524B engines, plus options for 14 more.
Borger said William F. Hibbs, Director Research and Evaluation, would be the prime project engineer for Pan Am’s L1011 program. “In addition to developing the final spec,” Borger said, “work will now accelerate on design and ordering of seats, galleys, special avionics, safety equipment and numerous other equipment for the new airplane, as well as spare parts and tooling.”
Meantime, an operations evaluation team headed by Capt. William A. Brown, Director Flight Operations-Technical, is working with its counterpart team at Lockheed in California on development of flight manuals, operating techniques, simulator use and other flight aspects which will lead to acceptance of the first L1011 in
Pan Am colors in early 1980.
Borger and Captain Brown pointed out that Pan Am’s L1011s will be the first with a new, improved wing designed to give a better ride and save on fuel.
Precision sensing devices and advance technology controls on the L1011-500’s slightly longer wing seek out disturbances caused by rough air, and respond instantly, thus affording a smoother ride for passengers.
Chairman Seawell called a news conference April 4 to reveal details of the $500 million Lockheed purchase. Earlier, at the regular monthly meeting of the Board of Directors, senior management officials had outlined the pros and cons of various aircraft and engines available.
Seawell told newsmen that the search for a new aircraft had been “a long affair in which some dozen various airplanes had been looked at.”
The selection, he said, was eventually narrowed to three superior airplane families...the Boeing 747, McDonnell Douglas DC-10 and the L1011. The prime objective was to select the best economic fit for Pan Am’s route systems and operations—the airplane that would give Pan Am the lowest operating cost and permit us to offer the lowest economic fares.
“Our studies showed that airplane to be the L1011-500 with the Rolls Royce RB211-524B
engine.”
Seawell noted that according to engineering and operating studies, the L1011-500’s operating costs per plane mile were 8 to 10 percent lower than the closest competitor.
Financing for the purchase, Seawell told newsmen, was in place through an agreement that the Export Credit Guarantee Department (ECGD), the U.K. equivalent of the U.S. Export-Import Bank, would guarantee financing of the entire purchase.
He said the new aircraft, which will have a configuration of 24 first class and 218 economy seats, will be used initially over Pan Am’s Latin America routes as well as selected Atlantic and U.S. domestic routes. Economy seating will be nine abreast and galley complexes will be located for-
Pan Am narrowed its first quarter net loss in 1978 to $24.1 million from a net loss of $26.9 million for the same period last year.
Total operating revenues increased 12.3 percent for the first quarter, while total operating expenses increased 10 percent.
For the month of March 1978, the company reported a net profit of $300,000, compared with a net loss of $1.4 million for the same month a year ago.
Operating revenues for March 1978 increased 17.2 percent from 1977 while operating expenses increased 11.2 percent.
The March 1978 figures include capital gains from the
ward of first class and aft of economy. The aircraft will have eight lavatories.
Noting that the L1011-500 is essentially a replacement aircraft for the 707, Seawell told reporters that the commonality problems arising from introducing a Lockheed aircraft into an all-Boeing fleet would be “handled by Pan Am with confidence.”
Commonality, he said, is a problem that this airline has dealt with before and “we do not expect any undue difficulties” with the introduction of the L1011.
The L1011-500 is the first Lockheed-built aircraft to join the Pan Am fleet since the Constellation in 1946. It was the L049 Connie that Pan Am used to inaugurate the first Continued on page 7
disposition of equipment of $800,000, compared to $9.4 million for March 1977. Included in the 1977 amount is $7.5 million of insurance proceeds over the book value of a destroyed aircraft.
There are no federal income tax provisions or credits for 1978 and 1977 since existing legislation permits airlines to fully offset income taxes with available investment tax credits.
First quarter 1978 results include $1.6 million in capital gains from the disposition of equipment, compared with $10.5 million for the same period last year which includes the insurance proceeds mentioned above. □
In this issue...
New customs procedure in effect at Seattle-Tacoma Airport..........page 2
Sheeiine talks about Inter-Continental.............................page 3
First seminar for black travel agents..............................page 7
Filipino employee turns songwriter................................. page 8
1st quarter loss trimmed
1