Pan Am clipper, Vol. 8, No. 5, May 1982

              Volume 8 Number 5
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CUPPER
Shareholders approve ESOP; Gould elected
As of June 2, all U.S. domestic and many foreign Pan Am employees will own a share of our company — thanks to an overwhelming vote by shareholders approving the Employee Stock Ownership Plan proposal at the company’s annual meeting in Houston May 11.
Stockholders, voting in person and by proxy, approved the issuance of $35 million worth of Pan Am common stock (about 12 percent of outstanding shares) to be placed in a trust for the employees, to be collectable by individuals under certain conditions in the future.
The shareholders also voted approval of the nominees for Pan Am’s Board of Directors, including Robert Gould, a Boeing 747 pilot and Chairman of the Pan Am ALP A Master Executive Council. Gould becomes the second leader of organized labor to sit on the board of a major U.S. corporation (the
United Auto Workers’ Douglas Fraser is on the board of Chrysler Corporation).
Others elected to the Board are Chairman Acker, President Waltrip and Executive Vice President-Operations John J. Casey, plus Robert B. Anderson, Donald M. Kendall, Paul C. Sheeline and Marietta Tree, all of New York; William T. Coleman Jr., Robert W. Haack and Sol Linowitz of Washington, D. C.
Also, Lowell S. Dillingham of Honolulu, Luis B. Hector of Miami, Ben F. Love of Houston, Akio Morita of Tokyo, Jack S. Parker of Prineville, Oregon, and G. Robert Truex Jr. of Seattle.
In the remarks to the shareholders, Chairman Acker reviewed the steps Pan Am has taken to improve our service product, schedule reliability, and financial position in the past year.
“We are not a ‘financially ailing
carrier,’ as some newspapers have erroneously described us,” Acker said. “We are not worried about our ability to remain a viable operation. We have time to correct our faults and solve our problems and improve our service and do all the other things that we must do to get our airline back on the route of profitability.”
However, he said, “Our continuing airline losses underscore the gravity of the situation our company finds itself in today. We are going through a very difficult period, and the fact that the entire airline industry is in a bad way doesn’t alleviate our problems.
“What we must do, obviously, is to find ways to build our revenues and cut our costs — and that is just what we’re doing.”
He pointed out that the Pan Am World Services Division’s earnings before taxes showed a 27 percent continued on page 10
ELECTED — Chairman Acker congratulates First Officer Robert Gould on his election to Pan Am’s Board of Directors at the Annual Shareholders Meeting held May 11 in Houston. Gould is the first employee to sit on the board of a U.S. airline, and the second union official to hold such a position in a major American corporation.
The copter’s coming
Acker says:
We’ll fight CAB route decisions
NEW HELICOPTER SERVICE—First and Clipper Class passengers can take advantage of Pan Am’s free new helicopter service from New York’s East 60th Street Heliport and Kennedy Airport.
Pan Am will offer free helicopter service between Manhattan’s East 60th Street Heliport and the airline’s Worldport Terminal at Kennedy International Airport for all First Class and Clipper Class passengers starting June 1.
In announcing the service, President Bill Waltrip said, “We are determined to provide First Class and Clipper Class customers with the ultimate in passenger service convenience . ” He said the free helicopter service will permit an eligible Pan Am passenger to check in at the Manhattan Heliport as little as 30 minutes prior to the Kennedy Airport flight departure.
“We will also have a check-in location at the Vanderbilt Avenue Ticket Office in the Pan Am Building which will enable commuters in the Grand Central Station area to receive a seat assignment and check their luggage in the morning, go to work, and then directly to the Manhattan Heliport at the end of
the day for their connecting flight to the Worldport,” Waltrip said.
The service will be operated with twin-engine, six-passenger Bell 222 helicopters utilizing a two-pilot crew. The Bell 222 will be the only twin-engine helicopter providing scheduled service in the New York metropolitan area.
Flights will be every half hour, with the first departure from East 60th Street at 8 a.m. and the last flight leaving for Kennedy at 7:30 p.m.
In the opposite direction, flights will leave every 30 minutes from Pan Am’s Worldport starting at 7:45 a.m. with the last departure for the Manhattan Heliport at 7:45 p.m.
Altogether there will be as many as 19 daily roundtrip flights with the flying time scheduled for 8 minutes. The helicopter will land adjacent to Gate 8 at the Pan Am Worldport Terminal. Upon arrival at the Ter-continued on page 2
Pan Am will continue legal action against the Civil Aeronautics Board, in the wake of the Board’s decision concerning award of Braniff’s routes both prior to and following the carrier’s shutdown of operations on May 12.
The company has asked the U.S. Court of Appeals to reverse the CAB’s decision to grant Eastern Airlines Braniff’s Latin American routes, charging the Board with “blatant use of a double standard” in disapproving an agreement between Pan Am and Braniff and then approving a virtually identical agreement between Eastern and Braniff. The error was seriously compounded, Pan Am said, when the Board granted Eastern interim authority to operate the Braniff Latin American routes for 15 months, delaying the selection of a permanent successor to Braniff. “This error must be corrected immediately, if it is to be corrected at all,” the Pan Am suit stated. “The CAB’s gross abuse of Pan Am’s due process rights demands immediate redress by expediting this appeal.”
YOU CAN’T BEAT THE EXPERIENCED A Look at Employee Circles, pages 8 and 9.
Pan Am and Delta Airlines also filed separate appeals against the CAB’s awards of Braniff routes to other carriers after the airline suspended its flights. The Board awarded temporary authority on the Dallas/Ft. Worth to London route to American Airlines. Continental received rights from Houston and New Orleans to Caracas, and was authorized to fly from Dallas/Ft. Worth to Mexico City. The awards are in effect until April 1983.
Pan Am had asked the Board for immediate authority to serve Dallas/Ft. Worth/Houston/New Orleans and Maracaibo/Caracas; Santiago and Buenos Aires; Dal-
Pan Am posted a first quarter loss of $127.3 million, as major U.S. airlines reported record financial losses for the period. (See box.)
The 1982 loss compared with last year’s first quarter net loss of $ 121.6 million excluding the earnings of the Intercontinental Hotels Corporation which Pan Am sold in September 1981.
Including Intercontinental’s earnings, Pan Am’s net loss in last year’s first quarter was $114.5 million.
The results reflected a 2.7 decline in scheduled passenger traffic and downward pressure on revenue passenger yields due to continued fare discounting during much of the quarter. Revenues were also adversely affected by approximately $23 million due to unfavorable currency ex-
las/Ft. Worth and London; Los Angeles/San Francisco and Qui-to/Guayaquil/Lima/Bogota, and between New York/Washington and Quito/Guayaquil/Lima/Bo-gota.
Both Pan Am and Delta alleged that the CAB violated precedent in the London and Caracas awards by failing to select carriers already serving those cities.
Braniff filed for bankruptcy on May 13 (see page 10). Prior to that, Pan Am had filed suit against the airline for breach of contract. The company and Braniff had entered into an agreement under which Pan Am would operate continued on page 7
change rates in foreign markets.
Other airlines also cited reduced traffic and discounted fares as major factors in what was described by several analysts as the worst first quarter in airline history. Delta, TWA and Eastern all reported their sharpest quarterly losses ever. Delta’s loss of $18.4 million was the carrier’s first since 1957.
Pan Am’s consolidated operating revenues in the first three months of 1982 were $853.8 million, down 2.4 percent from the first quarter of last year, excluding IHC. Consolidated operating expenses decreased 0.9 percent to $953.9 million.
Airline operating revenues were $780.7 million, down 3.6 percent. Airline operating expenses de-continued on page 3
Quarter loss $127 million: record industry deficits
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