Pan Am clipper, Vol. 11, No. 8, November 1985

              DOT Approves Pacific Division Sale To United
The sale of Pan Am’s Pacific Division to United is now awaiting review by President Reagan following Secretary of Transportation Elizabeth Dole’s decision that the transfer should be approved.
President Reagan has 60 days to review Dole’s findings which were forwarded to the White House on October 31. Under the Federal Aviation Act, the President may only disapprove the agreement based on foreign relations or national defense considerations. If the President does not disapprove the agreement within 60 days, or does not notify DOT that he intends to disapprove the agreement, the Department of Transportation decision becomes final.
The agreement is also contingent upon approval by the Japanese government. Although United must obtain operation rights authority from several other foreign governments in the Pacific before it can begin services, final consummation of the Pan Am - United agreement is not dependent upon United obtaining such authority.
In its decision, the DOT clearly noted that in the event the Japanese approval is obtained before United receives operating rights authority from other foreign governments, United would commence service to Japan, and Pan Am would continue its current service over the remaining Pacific routes by leasing aircraft and facilities from United until the necessary additional approvals are obtained.
Dole said that comments received by DOT since its tentative decision was reached in early October to approve the pact “do not, for the most part, raise new evidence or argument,” Rather, she said, such comments in fact “serve to reinforce the tentative decision.”
Dole saw no reason to change her tentative conclusion that United’s replacement of Pan Am, “and consequent removal as the third U.S.-flag competitor, does not appear likely to result in a substantial lessening of (Continued on P 2)
Financial Impact Of Pacific Sale To Be Immediate
When the sale of Pan Am’s Pacific Division to United Airlines is completed — once the Japanese government has granted operating rights to United — Pan Am’s financial health will improve almost immediately.
The $715.5 million cash payment, in addition to a reduction of some $137 million of lease obligation on seven of the Boeing 747SP aircraft being transferred to United, will substantially strengthen Pan Am’s balance sheet. While the total sales price for the Pacific Division was $750 million, $34.5 million was received earlier this year when a McDonnel Douglas DC-10-30 was delivered to United Airlines.
Pan Am will be required to use $234 million of the total sales proceeds to pay off debt associated with Lockheed L1011-500 aircraft that will go to United. But the company has not yet finally determined how it will use the remainder of the money. There has been speculation on the part of some Wall Street security analysts that Pan Am will use part of the proceeds to voluntarily retire other debt. But Chairman Acker says that decision will be made later — based on interest rate and market conditions at the time.
Once the transaction has taken place, Pan Am will record a capital gain of about $434 million. The gain is calculated by subtracting the book value of the assets that are being sold—airplanes, other flight equipment and ground equipment — from the sales pro-(Continued on P 8)
WOW!!! What A Trip!!!
Neal Chase, 747 Pilot From SFO, is flying high with a bottle of the finest private label French Armagnac liquer, one of more than a dozen unique gifts presented to winners on the Airbus/Pan Am Partnership Celebration Sweekstakes tour. The 100 Pan Amers and their travel companions were awarded a nine-day, all expenses paid VIP tour of the four European countries involved in the manufacture of the Airbus. Story and more pictures begins on page 4.

RWAIVI
VOL. 11, NO. 8
NOVEMBER 1985
CLIPPER
U.S. Division Reorganization Results In Promotions For Many
Hans Mirka, Pan Am’s new Senior Vice President Field Sales and Services, has announced a new realignment of the TTt; Division which will provide for a more streamlined and efficient operation by reducing the number of regions from five to four. Mirka will continue to head the U.S. Division in his new position.
Under the reorganization, the New York Region will become the Northeastern Region, which will be headed by Thor Johnson, newly named as Regional Managing Director. The Region will carry the responsibilty for six airports...JFK, LGA, BDA, BOS, PIT and PHL, and the marketing responsibility for New York, Pennsylvania, the New England states, Cananda and Bermuda.
Staff assignments for the new Northeast region include Bill Wangerien, who will be Regional Director of Services; SuzAnn Hull will assume the responsibilities of Director Passenger Services/JFK, replacing Gene Goo, who will be placed on special staff assignment to the Labor Relations Department. Cliff Vittorio will become Director
Ramp Operations at JFK. Frank Kwapni-ewski will leave JFK to become General Manager pt Phildel.oh.i?,.
The Northwest and Southwest Regions are being combined into a new Western Region which will be headed by Jim Baxter, serving as Regional Managing Director in San Francisco. Baxter will have operating responsibilty for SFO, LAX, HNL, SEA, DFW, SAT, AUS, HOU and CRP Marketing responsibilities include virtually the entire western half of the United States (see map). Diane Roberts has been named the new General Manager at LAX. Bud Elsaesser will move to SFO as General Manager.
The Eastern Region, to be headed by Regional Managing Director Nick Slovak, will have responsibility for the operation of DCA, LAD, CLE, DTW, MCI, CVG, IND and ORD. Marketing responsibilities will include states from the upper midwest to the middle Atlantic states (see map).
Armand Arel will continue as Regional Managing Director of the Southeast Region. Based in Miami, Arel will oversee the operations of MIA, TPA, MCO, BNA, CLT and
RDU. Marketing responsibilities will cover the southeastern United States.
In other moves in the U.S. Division reorganization, Bill Thro from TPA operations will become General Manager at RDU. Joe Cardinale will become Director Passenger Services Miami, replacing Dick Goetz who will become System Director Airport Passenger Services. Jorge Oiler, Director Airport Services Support, has been named the new General Manager of Cleveland.
Further refinements and consolidations in the sales organization and in other departmental areas will be accomplished by the Regional Managing Directors by early December. All Pan Am statistical data concerning the U.S. Division will reflect the new realignment beginning in January, 1986. O
Hans Mirka has been elected to the position of Senior Vice President Field Sales and Services by Pan Am’s Board of Directors. All of Pan Am’s Divi-
sion Vice Presidents will report directly to Mirka. The board also elected Jerry Murphy to the position of Vice President Passenger Sales at the November board meeting.
The U.S. Division has been reorganized from five regions to four, with all Regional Managing Directors reporting to Hans Mirka, Senior Vice President Field Sales and Services. Mirka will continue to head the U.S. Division.