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A lot of hours of work went into this tall stack of exhibits filed with the Civil Aeronautics Board in support of a Pan Am-National merger. Among the many employees working with Bruce Cunningham (right), Director-Airline Planning, and John MacCaffrey (left), Director-Regulatory Planning, were Jim Baxter, Harry Moss, T.J. Townsend, Jim Murphy and Seth Preece. The more than 2,500 pages of documents form the basis of Pan Am’s case in the merger hearings set to begin Oct. 31.
Record 3rd quarter profit reported
Pan Am reported 1978 third quarter earnings of $101.3 million, a record for any quarter in Pan Am’s history, and a 54.3 percent increase over the $65.6 million earned in the third quarter of last year.
The third quarter results boosted year-to-date earnings to a record level of $123.4 million, an improvement of 126.9 percent over the comparable 1977 results of $54.5 million.
Total operating revenues for the third period were $672.3 million, up 19.5 percent over 1977, and also a record for any quarter. Total operating expenses increased 17.2 percent
over the restated previous year’s figure.
The results for the third quarter of 1978 include gains on the disposal of equipment of $1.2 million, compared to $3.8 million for the 1977 period.
The third quarter results also include capital gains of $4 million in connection with the sale of the interests in two hotel properties.
For the first nine months of the year, operating revenues increased to $1,669 million, a 16.3 percent increase compared to the previous year. Operating expenses increased 13.2 percent during the same period. □
Regulatory reform passes; noise legislation stalled
The marathon closing session which saw the 95th U.S. Congress finally adjourn at 7 p.m. on a Sunday evening produced long-sought legislation giving Pan Am new domestic route opportunities. Efforts to secure an aircraft noise bill, however, were stifled in the final hours by parliamentary tactics.
Passage of regulatory reform legislation by the Congress just prior to adjournment on Oct. 15 (the bill was signed into law by President Carter on Oct. 24) culminates efforts by both the Ford and Carter administrations to have greater competition among airlines in the U.S. Pan Am was one of the very first carriers to support such efforts. Two principle objectives of the company— an opportunity to enter domestic routes and to gain expanded fill-up authority — are secured by the new law.
Under the automatic domestic entry provisions of the new regulatory reform law, each year for
the next three years, Pan Am may select one new domestic route. In each of the years, carriers can select one domestic route for protection from automatic entry by another airline.
The process begins on Jan. 2, 1979, when carriers who want to protect a particular route must notify the CAB which route it wants to protect (routes to Hawaii are not involved). Then, during the first 30 days of the year, airlines may file a new route request with the Board. The law provides that the CAB must approve the requests within 60 days, unless it finds a carrier not “fit” to provide the service.
Should Pan Am, for example, submit an application for a domestic route, and subsequently determine that one or more other airlines are seeking the same route, the company would have the option of keeping the route applied for, or submitting an application for another route, continued on page 8
Merger exhibits filed
A Pan Am-National merger is the only way Pan Am can obtain the domestic routes it urgently needs, Pan Am told the Civil Aeronautics Board last month in exhibits filed in support of the merger proposal.
“Pan Am is the only international airline without a route system in its own country,” the carrier pointed out in the introduction to the more than 2,500 pages of documentation. “And we cannot afford the billion dollar cost or the time it would take to create a domestic system from scratch.
“We are in the untenable position of being subjected to new competition from foreign flag carriers with strong route systems beyond their homelands—as well as U.S. flag carriers with strong domestic traffic support—-yet we have no meaningful opportunity for expansion beyond our own operations,” the company said.
To the consumer, a merger will mean lower air fares and better service because of the excellent route integration of the two airlines, and the cost savings that would result. “From a public point of view, this merger will produce a competitor far stronger than the two carriers individually,” the company said.
If the merger is approved, Pan Am said it would expand many of the popular low fares it is now providing on international flights— such as the Budget and standby
fares—to the domestic network.
The five thick volumes of exhibits were filed with the CAB on Oct. 13, with hearings set to begin Oct. 31 before Administrative Law Judge William Dapper.
Complete with charts, maps, graphs and illustrations to back up the documentary material, the exhibits contain everything from a list of the multitude of new schedules a merger would permit, to fuel consumption forecasts, market statistics of competitors, to proposed advertising for the merged carrier.
As was first stated in the announcement of the Pan Am-National merger agreement in early September, the exhibits reiterate that no employees of either airline will lose their jobs as a result of the merger.
“Pan Am needs a system comparable to that of the smaller domestic trunks, to permit it to develop the kind of hub and spoke operation necessary to produce meaningful new international traffic,” the company said. “And we need such a system as soon as possible; the raDidly changing conditions in the international
marketplace do not give us time to build up a domestic operation gradually.”
Pan Am noted that new competition by foreign flag carriers and new awards to U.S. flag carriers has already forced it to seek suspensions of a number of routes. “Without access to domestic markets the inevitable result will be further contraction to maintain profitability,” Pan Am concluded.
Because the route systems of National and Pan Am are almost ideally matched, numerous new single-
plane, single flight and single carrier services will be made availble to the public by a Pan Am-National merger.
Volume IV of the exhibits—a six-inch thick volume—is devoted to Pan Am’s proposed 1980 schedules, illustrating the new and more direct service between dozens of U.S. cities and most parts of the world that a merger would permit.
Passengers from the energy-producing region of the Texas-Louisiana Gulf Coast, for instance, will be given more direct service to the Middle East, Europe, Latin continued on page 7
“We are giving assurances that there will be more employment, not less, as a result of a combination of Pan Am and
—Chairman Seawell, in remarks to business and civic leaders in Miami on Oct. 24.
“IT’S TIME TO LET PAN AM COME HOME.” That’s the theme being used by the Aware Committee in supporting the merger of Pan Am and National. Here, the slogan was carried out at the Aware Committee’s booth at the American Society of Travel Agents Convention in Acapulco. Shown at left is Tom Koyles, JFK mechanic, with his wife Dorothy Koyles pinning an Aware button on one of the more than 5,000 travel agents attending the convention. It was the second year that Aware has participated at the AST A convention. Meanwhile, Aware political coordinators from all over the U.S. got together in New York late last month to discuss other ways of spreading the word that it is “time to let Pan Am come home.” After a briefing from top management on the merger, the coordinators went back to their home stations to work out local strategies for supporting the Pan Am-National merger.
In this issue...
Pan Am shrinks the Pacific..................................page 3
London employee keeps Pan Am’s image flying.................page 7
Washington sales agent recalls flight from Saigon...........page 8
1
Object Description
Description
| Title | Page 1 |
| Object ID | asm0341005479 |
| Digital ID | asm03410054790001001 |
| Full Text | A lot of hours of work went into this tall stack of exhibits filed with the Civil Aeronautics Board in support of a Pan Am-National merger. Among the many employees working with Bruce Cunningham (right), Director-Airline Planning, and John MacCaffrey (left), Director-Regulatory Planning, were Jim Baxter, Harry Moss, T.J. Townsend, Jim Murphy and Seth Preece. The more than 2,500 pages of documents form the basis of Pan Am’s case in the merger hearings set to begin Oct. 31. Record 3rd quarter profit reported Pan Am reported 1978 third quarter earnings of $101.3 million, a record for any quarter in Pan Am’s history, and a 54.3 percent increase over the $65.6 million earned in the third quarter of last year. The third quarter results boosted year-to-date earnings to a record level of $123.4 million, an improvement of 126.9 percent over the comparable 1977 results of $54.5 million. Total operating revenues for the third period were $672.3 million, up 19.5 percent over 1977, and also a record for any quarter. Total operating expenses increased 17.2 percent over the restated previous year’s figure. The results for the third quarter of 1978 include gains on the disposal of equipment of $1.2 million, compared to $3.8 million for the 1977 period. The third quarter results also include capital gains of $4 million in connection with the sale of the interests in two hotel properties. For the first nine months of the year, operating revenues increased to $1,669 million, a 16.3 percent increase compared to the previous year. Operating expenses increased 13.2 percent during the same period. □ Regulatory reform passes; noise legislation stalled The marathon closing session which saw the 95th U.S. Congress finally adjourn at 7 p.m. on a Sunday evening produced long-sought legislation giving Pan Am new domestic route opportunities. Efforts to secure an aircraft noise bill, however, were stifled in the final hours by parliamentary tactics. Passage of regulatory reform legislation by the Congress just prior to adjournment on Oct. 15 (the bill was signed into law by President Carter on Oct. 24) culminates efforts by both the Ford and Carter administrations to have greater competition among airlines in the U.S. Pan Am was one of the very first carriers to support such efforts. Two principle objectives of the company— an opportunity to enter domestic routes and to gain expanded fill-up authority — are secured by the new law. Under the automatic domestic entry provisions of the new regulatory reform law, each year for the next three years, Pan Am may select one new domestic route. In each of the years, carriers can select one domestic route for protection from automatic entry by another airline. The process begins on Jan. 2, 1979, when carriers who want to protect a particular route must notify the CAB which route it wants to protect (routes to Hawaii are not involved). Then, during the first 30 days of the year, airlines may file a new route request with the Board. The law provides that the CAB must approve the requests within 60 days, unless it finds a carrier not “fit” to provide the service. Should Pan Am, for example, submit an application for a domestic route, and subsequently determine that one or more other airlines are seeking the same route, the company would have the option of keeping the route applied for, or submitting an application for another route, continued on page 8 Merger exhibits filed A Pan Am-National merger is the only way Pan Am can obtain the domestic routes it urgently needs, Pan Am told the Civil Aeronautics Board last month in exhibits filed in support of the merger proposal. “Pan Am is the only international airline without a route system in its own country,” the carrier pointed out in the introduction to the more than 2,500 pages of documentation. “And we cannot afford the billion dollar cost or the time it would take to create a domestic system from scratch. “We are in the untenable position of being subjected to new competition from foreign flag carriers with strong route systems beyond their homelands—as well as U.S. flag carriers with strong domestic traffic support—-yet we have no meaningful opportunity for expansion beyond our own operations,” the company said. To the consumer, a merger will mean lower air fares and better service because of the excellent route integration of the two airlines, and the cost savings that would result. “From a public point of view, this merger will produce a competitor far stronger than the two carriers individually,” the company said. If the merger is approved, Pan Am said it would expand many of the popular low fares it is now providing on international flights— such as the Budget and standby fares—to the domestic network. The five thick volumes of exhibits were filed with the CAB on Oct. 13, with hearings set to begin Oct. 31 before Administrative Law Judge William Dapper. Complete with charts, maps, graphs and illustrations to back up the documentary material, the exhibits contain everything from a list of the multitude of new schedules a merger would permit, to fuel consumption forecasts, market statistics of competitors, to proposed advertising for the merged carrier. As was first stated in the announcement of the Pan Am-National merger agreement in early September, the exhibits reiterate that no employees of either airline will lose their jobs as a result of the merger. “Pan Am needs a system comparable to that of the smaller domestic trunks, to permit it to develop the kind of hub and spoke operation necessary to produce meaningful new international traffic,” the company said. “And we need such a system as soon as possible; the raDidly changing conditions in the international marketplace do not give us time to build up a domestic operation gradually.” Pan Am noted that new competition by foreign flag carriers and new awards to U.S. flag carriers has already forced it to seek suspensions of a number of routes. “Without access to domestic markets the inevitable result will be further contraction to maintain profitability,” Pan Am concluded. Because the route systems of National and Pan Am are almost ideally matched, numerous new single- plane, single flight and single carrier services will be made availble to the public by a Pan Am-National merger. Volume IV of the exhibits—a six-inch thick volume—is devoted to Pan Am’s proposed 1980 schedules, illustrating the new and more direct service between dozens of U.S. cities and most parts of the world that a merger would permit. Passengers from the energy-producing region of the Texas-Louisiana Gulf Coast, for instance, will be given more direct service to the Middle East, Europe, Latin continued on page 7 “We are giving assurances that there will be more employment, not less, as a result of a combination of Pan Am and —Chairman Seawell, in remarks to business and civic leaders in Miami on Oct. 24. “IT’S TIME TO LET PAN AM COME HOME.” That’s the theme being used by the Aware Committee in supporting the merger of Pan Am and National. Here, the slogan was carried out at the Aware Committee’s booth at the American Society of Travel Agents Convention in Acapulco. Shown at left is Tom Koyles, JFK mechanic, with his wife Dorothy Koyles pinning an Aware button on one of the more than 5,000 travel agents attending the convention. It was the second year that Aware has participated at the AST A convention. Meanwhile, Aware political coordinators from all over the U.S. got together in New York late last month to discuss other ways of spreading the word that it is “time to let Pan Am come home.” After a briefing from top management on the merger, the coordinators went back to their home stations to work out local strategies for supporting the Pan Am-National merger. In this issue... Pan Am shrinks the Pacific..................................page 3 London employee keeps Pan Am’s image flying.................page 7 Washington sales agent recalls flight from Saigon...........page 8 1 |
| Archive | asm03410054790001001.tif |
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