Pan Am clipper, Vol. 12, No. 2, March 1986

              Performance Critical To Success In 1986
In survey after survey of airline passengers, particularly surveys of frequent business travelers, on-time dependability is consistently rated as the single most important measure of airline service. Frequent business travelers rate the importance of on-time performance above spacious seating, inflight service and discounted airfares. In short, the traveler is saying that he or she expects the airline to leave on time and arrive on time. The surveys further indicate that on-time performance and schedule dependability are among the most important considerations in choosing an airline. The message is loud and clear.
Pan Am Senior Vice President of Field Sales and Services, Hans Mirka, has instituted a new policy in the area of on-time performance for Pan Am after 1985 operating figures showed that only 63% of Pan Am flights, on the average, operated within five minutes of their scheduled departure time. The policy establishes an achievable goal for on-time dependability across the system. 75% of all flights will depart within five minutes of schedule and 81% of all flights will arrive within 15
minutes of schedule. “On-time arrivals and departures are what Pan Am’s timetables promise our customers and they expect us to deliver on that promise,” Mirka said. “If we’re going to achieve our 1986 objective of setting the industry standard for excellence in service quality, then we must begin by respecting the traveler’s well-articulated preference for on-time performance.”
“Simply being on time is not an end unto itself,” says Mirka. Dependability and service levels are closely linked by the customer in his reaction to ticket agents, flight attendants, meal service and baggage delivery. (Continued on p.5)
Skilled Hands-Part Of The Pan Am Product
Joseph Chan’s Concentration Is Intense as he goes to work on a fan blade for a Pan Am 747 jet engine. The titanium blade is no ordinary piece of metal. A set of blades for an entire engine costs more than $170,000. Chan is removing small nicks and dings from the fan blade while ensuring that the blade’s airfoil design Is preserved to exact specification. Chan and other “unsung heroes” of Pan Am’s Maintenance team are profiled in a feature story on page 3.
VOL. 12, NO. 2
MAR./APR. 1986
CLIPPER
Pan Am To Be Primary Tenant In New JFK MEGA-Terminal
Pan Am’s Eastern Europe Plays Major Role In ’86
Eastern Europe is expected to be experienced by more Americans than ever before in 1986. Part of the reason is the increasing accessiblity of many eastern European countries—accessibility in terms of both wider doors welcoming the American tourist and in expanded flight schedules as Pan Am shifts a significant part of its focus to eastern Europe.
Eastern Europe is a new destination for most Americans, and is bound to be a popular one, especially for those with ethnic family ties to countries such as Poland, Yugoslavia, Czechoslovakia, Hungary and Romania. In the spring of 1985, Pan Am introduced new services to Warsaw, Belgrade and Bucharest. The 1986 schedule has been expanded to include virtually all major destinations in eastern Europe in addition to the Soviet Union.
“Pan Am’s Europe in 1986 is bigger than ever before,” says Jack Conroy, System Director-Advertising. With 32 European destinations on the schedule, Pan Am is flying to more places in Europe than all other U.S. airlines combined,” says Conroy. Conroy says that Pan Am is not advertising eastern Europe apart from the rest of the European continent, although he recognizes that many travel agents and tour operators do make the distinction. Pan Am, too, in its sales efforts makes the distinction. Ivan Dezelic is Director of Sales for Eastern Europe and the U.S.S.R. and Chris Pavich serves as Manager of Sales for the same area.
Together, their sales effort is highly specialized. That is, in part, because so little is known about eastern European destinations compared with the more high-profile cities such as Rome, Paris and London. In the past, Americans simply have not given the same kind of consideration to countries like Poland and Yugoslavia as they have to England and France when planning their vacations. The option just wasn’t there in the past, or if it was, it was limited by travel restrictions.
Pan Am’s expansion into eastern Europe will significantly increase the hub role of Frankfurt both to eastern Europe and to the United States. Pan Am’s transatlantic B747 flights will feed into Frankfurt from six U.S. gateway cities (see chart) where they will provide direct or connecting service to Zagreb, Belgrade, Dubrovnik, Warsaw, Krakow, Vienna, and Prague as well as (Continued on p.5)
Pan Am will be the principal tenant in a giant new terminal facility at John F. Kennedy International Airport which is expected to be completed in the early 1990 s. The new terminal, which is expected to have as many as 48 gates—each capable of handling a 747—will be built on a site which includes the existing United Airlines terminal, opposite the Pan Am WorldPort at JFK. The United terminal would be tom down in phases to accomodate the construction of the new mega-terminal without significantly impacting the airport’s increasing need for terminal space.
For months, there has been speculation that Pan Am and United Airlines were planning such a terminal. Even the news media picked up on the story, though it was largely labeled as a “rumor” in most quarters. But it wasn’t a rumor. Pan Am has been working closely with the Port Authority for more than a year on the new terminal project through its Corporate Real Estate Division, headed by General Manager Larry Billett. “With more than 10,000 employees in the New York area,” said Billett, “Pan Am, more
than anyone, is anxious to see Kennedy Airport expand into a facility that can meet the needs of the airlines and the traveling public well into the next century.”
Pan Am has recognized for years that, despite major renovations to the WorldPort, Kennedy International Airport had fallen behind other important international airports in the United States. Pan Am has watched—and, in some cases, has been involved in—the growth and expansion of airports in Miami, Atlanta, Chicago, Baltimore, Dallas-Fort Worth, San Francisco, Los Angeles, Pittsburgh, Honolulu and Washington-Dulles. There was early recognition that substantial new terminal development was essential at JFK for the New York area to be able to handle the continuing growth in domestic and international airline traffic. Billett said Pan Am took the lead in discussions with the Port Authority because Pan Am is the only major airline operating at Kennedy Airport that is truly New York-based. “Not only is Pan Am’s Corporate Headquarters located in New York,” said (Continued on p.5)
New LAX Terminal Set For Completion In 1989. Plans have been unveiled for Pan Am’s new terminal facilities at Los Angeles International Airport. In a joint venture with Northwest, Air Canada, Hawaiian Air and People Express, Pan Am is constructing the facility that will Include a totally refurbished ticketing building and an entirely new terminal that will replace the existing satellite at LAX Terminal 2. The terminal concourse, with eight gates, will connect directly with the ticketing building. Customs and immigration will be on the lower level. All gates will be capable of handling 747s. Pan Am will have priority rights on three gates, and additional rights on the remaining five, subject to certain needs of the other four airlines involved in the project. The Joint Venture has fully financed the new terminal with $94 Million In low cost, tax exempt bond funds.
Pan Am has not had to dip Into its own cash coffers to pay for any part of the new terminal.
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Company Reports $51.8 Million Profit In 1985
Pan Am Corporation’s 1985 net profit of $51.8 million, includes the gain on the sale of the Pacific Division. Excluding the sale, the Corporation would have shown a net loss of $289.2 million for 1985. That compares with a loss of $206.8 million in 1984.
The larger net loss from operations in 1985 is attributable in large part to the month-long strike against the airline last spring. Not only were revenues impacted during the strike when the airline was operating at considerably reduced levels, but it was a number of weeks after the strike ended before demand warranted bringing back capacity to year-earlier levels. In addition, it was necessary to implement fare discount programs to stimulate passenger demand. While these programs were successful in rebuilding traffic, they contributed to a decline in revenue passenger yield.
In the first part of the year, the airline also continued to be hurt by the strength of the U.S. dollar in relation to foreign currencies. While the dollar began to weaken during the year, because of the lag between the time (Continued on p.5)
Miami Hub Grows To Meet Expanded Schedule
As Pan Am grows, so grows Miami.
With the completion of the sale of Pan Am’s Pacific Division, and the company’s concentration on the buildup of its Atlantic and Latin American divisions, Miami’s unique geographic position is playing an increasingly growing role in Pan Am’s future.
The institution of new nonstop 747 Jet Clippers between Miami International and both Paris and Frankfurt will be but the ic-■ ing on the cake in a year of Pan Am expansion at the “Crossroads of the Americas.”
Simultaneous with the startup of the new flights to Europe—perfect companions to the existing daily 747 London nonstops—Pan Am will rebuild its Miami-Orlando “Air Bridge” service to the original 14 daily roundtrips, operating hourly from 7 a.m. to 8 p.m. northbound and 7:30 a.m. to 8:30 p.m. southbound.
Recent additional schedule buildups at Miami have included:
• Extension of Pan Am’s daily Miami-Rio (Continued on p.4)