Pan Am goes National : merger briefing, No. 4, April 17, 1980

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PANAM GOES NAnC
MERGER BRIEFING
No. 4
M GALEZO
N20 DEPT 168
PAN AM BUILDING
LQC
11 OOP
000 \
April 17, 1980
CHAIRMAN SEAWELL REPORTS SUBSTANTIAL PROGRESS ON MERGER INTEGRATION —
"Since the merger took place January 7, we have made substantial progress toward realizing the synergistic benefits of an integrated carrier. We are now looking for the emergence of a single Pan Am identity in early Fall," Chairman Seawell declared in a press briefing on April 10.
A day earlier, Chairman Seawell, President Dan Col ussy and other company officers gave a similar briefing to financial analysts. Again, the overall picture was one of substantial progress in a number of merger-implementation areas.
The company also reviewed the current adverse economic environment faced by the U.S. airline industry and stressed that regulatory lag that prevented Pan Am from recovering fuel-related cost increases on international routes meant the loss of about $100 million in revenue in 1979. Action taken by the Civil Aeronautics Board taking effect this month finally provides some relief, Mr. Seawell said, but not in time to affect the first quarter 1980 results. But the new Standard Foreign Fare Level adjustments, together with other company measures, "gives us the tools we need to turn our situation around during the remainder of the year," the Chairman declared. In fact, even with the company's singular fuel price situation last year, Pan Am's performance compared favorably with the industry average, he noted.
"In 1979, Pan Am's operating expenses increased 17.1 percent," he said. "However, if it hadn't been for fuel costs we were unable to recover because of regulatory lag, our operating expenses would have increased only 9 percent."
In his briefing, Seawell made the following key points:
-- Although we do not expect to establish a single airline identity until early Fall, much of the merger has already been accomplished, and more is being accomplished every day.
-- We expect to be experiencing some of the beneficial effects of the merger during 1980.
"The whole industry, including Pan Am, is suffering from the troubled economy.
But the new Pan Am is positioned to take advantage of any buoyancy in the economy in 1980 and expects to experience profitable growth in the years ahead," he said.
LABOR ISSUES ALSO REPORTED MOVING AHEAD
"Substantial progress" also was reported on the four major labor issues -- class-and-craft jurisdictional issues, representational issues, seniority issues and the subject of contract integration.
"Of these four, two -- the class-and-craft and the representational issues -- have been substantially resolved." And negotiations are under way on the other two, Chairman Seawell said.
He noted that creation of the single airline identity must lag interim accords with the IBT and TWU by two months, for the following reasons:
*	Public announcements, publication in airline guides and customer familiarization.
*	Reservation record transfers.
*	Final integration and training of the workforce.
IBT-ALEA INTEGRATION TALKS CONTINUE
On April 1, after several discussions with the International Brotherhood of Teamsters (IBT), the company presented the union with a complete proposal on contract integration with former National employees who had been members of ALEA. The proposal included a company proposal on contract integration.
(continued...)