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1st quarter results:
May ’80
Fuel costs fuel record deficit
Volume 6 Number 5
Seawell says:
Merger still on track
On April 25, Pan Am reported a net loss for the first quarter of 1980 of $74.9 million.
The results include the operations of the former National Airlines, which was acquired by Pan Am at year-end 1979. For the first quarter of 1979, Pan Am alone reported an $8.9 million loss. Combining the National and Pan Am operations on a pro-forma basis, net loss in the first quarter of 1979 would have been $12.1 million. (In a pro-forma statement, certain adjustments are made when combining the operations of the two airlines to more realistically show how the two companies would have performed had they been merged during 1979. In combining the first quarter 1979 operations of Pan Am and National, adjustments have been made primarily in interest expense, depreciation expense and income tax provisions.)
The company said soaring fuel prices—and the inability to adequately cover fuel costs with fare increases—were primarily responsible for the first quarter deficit. Fuel expenses increased 103 percent over fuel costs of the combined Pan Am/National operations last year, while consumption was actually down 1.4 percent. Price per gallon of fuel jumped from an average of 44.6 cents during the first quarter of
1979 to 91.5 cents this year.
Chairman William T. Seawell, said, “Pan Am—with its largely international system—has been severely affected by skyrocketing fuel prices. We have been frustated in our efforts to obtain fare increases to offset these costs, as the U.S. domestic airlines have been able to do. Although recent legislation gives us some relief as of April 1, it clearly comes too late to aid our first quarter results. However, taken with other measures, it does at long last give us the tool we need to turn our situation around during the latter part of the year.”
Operating revenues for the first quarter of 1980 reached $800.6 million, a 60.3 percent increase over the 1979 revenues of Pan Am alone, or an 18.6 percent increase over the revenues of the combined Pan Am/National operations. The combined increase resulted primarily from a 5.3 percent increase in revenue passenger miles flown and an increase of 11.6 percent in passenger yield compared with the combined 1979 data. Yield is the amount of revenue received per passenger mile flown.
Operating expenses for the first quarter of 1980 totalled $863.8 million of which $271.1 million, or 31.4 percent, represents fuel and continued on page 3
Chairman William T. Seawell said the merger of Pan American and National is going well, and that the two carriers should be operating under a single identity by early fall.
That statement was part of two briefings given by Seawell to financial analysts and members of the press on April 9 and 10 in New York.
Seawell said that substantial progress has been made towards the resolution of several labor issues including class and craft jurisdiction, representation, seniority and contract application. (Since the Chairman’s briefing, Pan Am and the Transport Workers Union have signed a Memorandum of Understanding covering seniority integration, contract application, the filling of mechanic’s jobs in Miami and Los Angeles, and the establishment of a joint Merger Working Committee.)
Seawell noted that the creation of a single airline identity must lag some two months behind the interim labor accords. “We need this
Chairman William T. Seawell answers questions from the financial press at a recent news conference in the Pan Am Building.
interim for public announcements, publication in the airline guides, and to develop customer familiarization
with the New Pan Am,” he said. “It also allows for transfers of reservation records, and for final training and integration of the work force.
“At the same time,” he continued, “many merger benefits can occur before all labor issues are formally resolved. Schedule integration, integration of facilities and completion of other major merger projects are in this category.
“We published a combined schedule in early February which offers U.S. and international travelers and shippers impressive new direct and connecting patterns. Also, our flight re-numbering efforts will mean more through flights, starting April 27.”
The Chairman said that Pan Am plans a strong hub system, combining international and domestic services at New York, Miami, Houston, Los Angeles and San Francisco, with secondary hubs at Washington, D.C. and New Orleans.
continued on page 7
Our Eagle, in its nest
CLIPPER NATIONAL EAGLE...the L1011-500 that is the most advanced airliner in the skies...joined the Pan Am fleet April 11. Taking possession of the new aircraft on behalf of Pan Am is B. W. Lawrence (right), Pan Am’s resident engineering representative at Lockheed. Turning over the log book and keys is Robert V. Williams, Lockheed’s vice president & general manager Commercial Programs, with Frances Morris, a Lockheed sales representative (second from left), and Edward Henderson, Lockheed contracts administrator, looking on.
We keep Miami-London; now watch us go & grow
On April 11, Pan Am took delivery of its first Lockheed L1011-500, and put the new jet into scheduled service on May 1 with a flight between New York and Caracas.
Clipper National Eagle, N504PA, is the first of six Dash 500 airliners Pan Am will receive this year. Pan Am is scheduled to receive six more Dash 500s in 1981 and has reserved options for 14 others.
In command of the first revenue passenger flight was Capt. John Powers, regional director flight operations and chief pilot-Atlantic. On its inaugural run, Clipper National Eagle carried 29 first class and 83 economy passengers; the return flight from Caracas the next morning carried 30 First Class and 156 Economy passengers.
The May 1 inaugural flight was preceded by a three-day Federal Aviation Administration proving flight which took a federal inspection team on a New York/Caracas/ San Juan/Houston/London/New York routing.
N504PA and a second L1011 due to be delivered to Pan Am in May will be used extensively for pilot training and Federal Aviation Administration demonstration flying prior to the inauguration of regular scheduled passenger flights in May.
The first passenger flight is scheduled for May 1 between New York and Caracas.
Pan Am’s L1011-500 will carry 36 First Class and 202 Economy passengers. It will have a maximum
range of 5880 statute miles (9656 km) and a cruising speed of 550 miles per hour (901 kph). □
A booklet outlining Pan Am’s new employee travel policy, effective May 1, has been distributed to all employees of the merged airline.
The new policy is designed to offer “the flexibility for all employees to enjoy traveling in the new Pan Am at the lowest possible cost.” The policy outlining free and reduced fare travel was designed to resolve the differences between the travel policies of Pan Am and National, with the goal of providing better travel privileges for employ-
More flights than ever before and a new low Budget fare will be available on Pan Am this summer between Miami and London’s Heathrow Airport. The new service will enhance Miami’s role as a transatlantic gateway for Americans and the growing number of overseas visitors alike, the airline said.
The Civil Aeronautics Board awarded the route to Pan Am on April 7, noting that changes resulting from the revised U.S.-U.K. air agreement undercut the CAB’s earlier objection to transfer of the Miami-London route from National to Pan Am as part of the merger.
Chairman Seawell said the company is “delighted with the CAB’s action, particularly since it gives us a firm basis for planning Miami-Heathrow services.”
Daily DC10-30 roundtrips, newly numbered as Flights 98 and 99, will be augmented by three DC10
ees and their immediate families.
Under this plan, you can literally go around the world for $45, or roundtrip in the U.S. for $15. The service charge, which is based on roundtrip mileage, takes you anywhere on the combined Pan Am/National system created by the January 7 merger.
“Every effort has been made to provide a fair, flexible and comprehensive travel package that compares favorably with the rest of the industry and emphasizes the privi-
charter trips a week in July. The charters will bring thousands of U.K. travelers to Florida.
A Budget fare was introduced this month on the Miami-London route for the first time, at the same level as standby, but offering the convenience of confirmed reservations. Peak season Budget/Standby fare is $459 roundtrip.
At the same time, a new economy class tariff—called the Sunshine Fare—was introduced to offer maximum savings but no advance booking, roundtrip, minimum stay or other restrictions. The passenger neither gets nor is required to pay for unwanted interline or stopover privileges. Those features are available in the higher-level Clipper Class fare.
Awaiting approval at presstime was a special Europe-South America Advance Purchase Excursion Artist
leges of employees and their immediate families,” said Mike Shield, system director Corporate Personnel.
Under the policy, after three months, all Pan Am employees are eligible for unlimited 50 percent Positive Space and unlimited 80 percent travel at S-6 Rapid Code, plus two annual personal trips for the employee and each family member at service charge, also at the S-6 priority. After a year, an annual vacation trip with accompanying family members at service charge at S-5—a higher priority—is added, plus two additional personal continued on page 2
continued on page 7
Travel policy set
Object Description
Description
| Title | Page 1 |
| Object ID | asm0341005496 |
| Digital ID | asm03410054960001001 |
| Full Text | 1st quarter results: May ’80 Fuel costs fuel record deficit Volume 6 Number 5 Seawell says: Merger still on track On April 25, Pan Am reported a net loss for the first quarter of 1980 of $74.9 million. The results include the operations of the former National Airlines, which was acquired by Pan Am at year-end 1979. For the first quarter of 1979, Pan Am alone reported an $8.9 million loss. Combining the National and Pan Am operations on a pro-forma basis, net loss in the first quarter of 1979 would have been $12.1 million. (In a pro-forma statement, certain adjustments are made when combining the operations of the two airlines to more realistically show how the two companies would have performed had they been merged during 1979. In combining the first quarter 1979 operations of Pan Am and National, adjustments have been made primarily in interest expense, depreciation expense and income tax provisions.) The company said soaring fuel prices—and the inability to adequately cover fuel costs with fare increases—were primarily responsible for the first quarter deficit. Fuel expenses increased 103 percent over fuel costs of the combined Pan Am/National operations last year, while consumption was actually down 1.4 percent. Price per gallon of fuel jumped from an average of 44.6 cents during the first quarter of 1979 to 91.5 cents this year. Chairman William T. Seawell, said, “Pan Am—with its largely international system—has been severely affected by skyrocketing fuel prices. We have been frustated in our efforts to obtain fare increases to offset these costs, as the U.S. domestic airlines have been able to do. Although recent legislation gives us some relief as of April 1, it clearly comes too late to aid our first quarter results. However, taken with other measures, it does at long last give us the tool we need to turn our situation around during the latter part of the year.” Operating revenues for the first quarter of 1980 reached $800.6 million, a 60.3 percent increase over the 1979 revenues of Pan Am alone, or an 18.6 percent increase over the revenues of the combined Pan Am/National operations. The combined increase resulted primarily from a 5.3 percent increase in revenue passenger miles flown and an increase of 11.6 percent in passenger yield compared with the combined 1979 data. Yield is the amount of revenue received per passenger mile flown. Operating expenses for the first quarter of 1980 totalled $863.8 million of which $271.1 million, or 31.4 percent, represents fuel and continued on page 3 Chairman William T. Seawell said the merger of Pan American and National is going well, and that the two carriers should be operating under a single identity by early fall. That statement was part of two briefings given by Seawell to financial analysts and members of the press on April 9 and 10 in New York. Seawell said that substantial progress has been made towards the resolution of several labor issues including class and craft jurisdiction, representation, seniority and contract application. (Since the Chairman’s briefing, Pan Am and the Transport Workers Union have signed a Memorandum of Understanding covering seniority integration, contract application, the filling of mechanic’s jobs in Miami and Los Angeles, and the establishment of a joint Merger Working Committee.) Seawell noted that the creation of a single airline identity must lag some two months behind the interim labor accords. “We need this Chairman William T. Seawell answers questions from the financial press at a recent news conference in the Pan Am Building. interim for public announcements, publication in the airline guides, and to develop customer familiarization with the New Pan Am,” he said. “It also allows for transfers of reservation records, and for final training and integration of the work force. “At the same time,” he continued, “many merger benefits can occur before all labor issues are formally resolved. Schedule integration, integration of facilities and completion of other major merger projects are in this category. “We published a combined schedule in early February which offers U.S. and international travelers and shippers impressive new direct and connecting patterns. Also, our flight re-numbering efforts will mean more through flights, starting April 27.” The Chairman said that Pan Am plans a strong hub system, combining international and domestic services at New York, Miami, Houston, Los Angeles and San Francisco, with secondary hubs at Washington, D.C. and New Orleans. continued on page 7 Our Eagle, in its nest CLIPPER NATIONAL EAGLE...the L1011-500 that is the most advanced airliner in the skies...joined the Pan Am fleet April 11. Taking possession of the new aircraft on behalf of Pan Am is B. W. Lawrence (right), Pan Am’s resident engineering representative at Lockheed. Turning over the log book and keys is Robert V. Williams, Lockheed’s vice president & general manager Commercial Programs, with Frances Morris, a Lockheed sales representative (second from left), and Edward Henderson, Lockheed contracts administrator, looking on. We keep Miami-London; now watch us go & grow On April 11, Pan Am took delivery of its first Lockheed L1011-500, and put the new jet into scheduled service on May 1 with a flight between New York and Caracas. Clipper National Eagle, N504PA, is the first of six Dash 500 airliners Pan Am will receive this year. Pan Am is scheduled to receive six more Dash 500s in 1981 and has reserved options for 14 others. In command of the first revenue passenger flight was Capt. John Powers, regional director flight operations and chief pilot-Atlantic. On its inaugural run, Clipper National Eagle carried 29 first class and 83 economy passengers; the return flight from Caracas the next morning carried 30 First Class and 156 Economy passengers. The May 1 inaugural flight was preceded by a three-day Federal Aviation Administration proving flight which took a federal inspection team on a New York/Caracas/ San Juan/Houston/London/New York routing. N504PA and a second L1011 due to be delivered to Pan Am in May will be used extensively for pilot training and Federal Aviation Administration demonstration flying prior to the inauguration of regular scheduled passenger flights in May. The first passenger flight is scheduled for May 1 between New York and Caracas. Pan Am’s L1011-500 will carry 36 First Class and 202 Economy passengers. It will have a maximum range of 5880 statute miles (9656 km) and a cruising speed of 550 miles per hour (901 kph). □ A booklet outlining Pan Am’s new employee travel policy, effective May 1, has been distributed to all employees of the merged airline. The new policy is designed to offer “the flexibility for all employees to enjoy traveling in the new Pan Am at the lowest possible cost.” The policy outlining free and reduced fare travel was designed to resolve the differences between the travel policies of Pan Am and National, with the goal of providing better travel privileges for employ- More flights than ever before and a new low Budget fare will be available on Pan Am this summer between Miami and London’s Heathrow Airport. The new service will enhance Miami’s role as a transatlantic gateway for Americans and the growing number of overseas visitors alike, the airline said. The Civil Aeronautics Board awarded the route to Pan Am on April 7, noting that changes resulting from the revised U.S.-U.K. air agreement undercut the CAB’s earlier objection to transfer of the Miami-London route from National to Pan Am as part of the merger. Chairman Seawell said the company is “delighted with the CAB’s action, particularly since it gives us a firm basis for planning Miami-Heathrow services.” Daily DC10-30 roundtrips, newly numbered as Flights 98 and 99, will be augmented by three DC10 ees and their immediate families. Under this plan, you can literally go around the world for $45, or roundtrip in the U.S. for $15. The service charge, which is based on roundtrip mileage, takes you anywhere on the combined Pan Am/National system created by the January 7 merger. “Every effort has been made to provide a fair, flexible and comprehensive travel package that compares favorably with the rest of the industry and emphasizes the privi- charter trips a week in July. The charters will bring thousands of U.K. travelers to Florida. A Budget fare was introduced this month on the Miami-London route for the first time, at the same level as standby, but offering the convenience of confirmed reservations. Peak season Budget/Standby fare is $459 roundtrip. At the same time, a new economy class tariff—called the Sunshine Fare—was introduced to offer maximum savings but no advance booking, roundtrip, minimum stay or other restrictions. The passenger neither gets nor is required to pay for unwanted interline or stopover privileges. Those features are available in the higher-level Clipper Class fare. Awaiting approval at presstime was a special Europe-South America Advance Purchase Excursion Artist leges of employees and their immediate families,” said Mike Shield, system director Corporate Personnel. Under the policy, after three months, all Pan Am employees are eligible for unlimited 50 percent Positive Space and unlimited 80 percent travel at S-6 Rapid Code, plus two annual personal trips for the employee and each family member at service charge, also at the S-6 priority. After a year, an annual vacation trip with accompanying family members at service charge at S-5—a higher priority—is added, plus two additional personal continued on page 2 continued on page 7 Travel policy set |
| Archive | asm03410054960001001.tif |
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