Pan Am clipper, Vol. 6, No. 8, August 1980

              Pan Am Building
The Pan Am Building, soaring 57 stories above Grand Central Station and astride Park Avenue, has been a landmark in the mid-Manhattan skyline since it was built. And it will remain so. Pan Am will remain the principal tenant with a 20-year lease and the new owners have agreed that the building will continue to display the Pan Am name and corporate logo on its facade.
We win a World Cup
“We surprised everybody,” jubilantly declared Joe Gantenham-mer.
Gantenhammer, coach of Pan Am’s New York-based soccer team, was speaking about last month’s 2-1 victory over TAP in the championship game of the World Cup Airline Soccer Tournament in Bratislava, Czechoslovakia.
“We’re playing as good or better than any airline team in the world,” he said. “TAP hadn’t lost a game in years, and they were the reigning European champions.”
The victory in the 55,000-seat Slovan Stadium came when Savas Tsitiridis, with a free kick in overtime booted in the winning goal.
Eddie Gantenhammer outplayed the entire defense and the TAP goalkeeper to score Pan Am’s first goal for a 1-0 lead that looked like it was good enough for the win. But with just minutes left, TAP was awarded a penalty kick that was drilled past Pan Am goalkeeper Dan
Clarke sending the game into overtime.
Tsitiridis’ title-clenching goal was booted into the opposite left-hand corner of the net after he was awarded a free kick from about 30 yards out with 7 V2 minutes gone in overtime. It was his fifth in the five-game world airline tournament.
Teammate Peter Rietz supplied the other half of Pan Am’s offensive punch, scoring four goals. Gunter Henrich split goalkeeping duties with Clarke during the tournament and limited the opposition to two goals in five games.
En route to the finals, Pan Am beat Air Jamaica TO, Aeromexico 6-0, Canadian Pacific Airways 6-0 and Air Canada 3-1.
The victory was all the more sweet because the previous week the Pan Am team was beaten 1-0 by KLM in the playoffs of the New York Airline Soccer League. It was their first loss at home in 10 years.
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sold for record $400 million
In what has been described as the largest real estate transaction for a single building, Pan Am will sell its Pan Am Building in midtown Manhattan to the Metropolitan Life Insurance Company for an estimated $400 million.
Chairman Seawell announced at a joint news conference on July 28 that the two companies had reached agreement in principle for the sale of the 59-story building situated next to historic Grand Central Station.
With Metropolitan Life Chairman and Chief Executive Officer Richard R. Shinn at his side, Seawell told a packed crowd of reporters and several Pan Am and Metropolitan officials in the Pan Am Board Room that the sale of the building did not indicate a lessening of Pan Am’s commitment to New York.
He noted that the company would continue as the building’s principal tenant, occupying substantial space under a new longterm lease with expansion and
Pan Am name, logo to be unchanged; long lease signed
renewal options. The building will retain its present name and the Pan Am sign and logo will remain on the facade. New York will remain the company’s corporate headquarters.
Seawell said that the sale represented a sensible corporate decision and that the funds realized from the transaction could be better deployed otherwise. The company expects to complete the transaction, which is subject to further negotiations and approval by the boards of directors of both companies, by September 1980. The $400 million sale price includes a credit for an existing first mortgage of about $50 million.
With 2.5 million square feet of space, the Pan Am Building is the third largest privately owned office
building in the world and the largest in midtown Manhattan. It was completed in 1963 and valued then at $115 million, including the site on which it is located. Pan Am originally owned 10 percent of the building, but later bought out the remaining interest to become sole owner in 1978. Later that year, Pan Am acquired the land underneath the structure.
Metropolitan will refurbish and modernize the concourse, lobby, elevators and other public spaces. The base of the building will be cleaned and windows will be covered with solar film in order to conserve energy.
With over $46 billion in assets, Metropolitan has invested in major real estate properties throughout the country. Said Metropolitan Chairman Shinn, “This important addition to our real estate portfolio provides an attractive investment opportunity. We expect to earn a good return for our policyholders.” □
2nd quarter loss: $66.3 million
Pan Am, burdened by high fuel costs and the effects of the recession, last month reported a $66.3 million net loss for the second quarter.
The results include the former National Airlines’ operations, and compare with second quarter 1979 net earnings of $22.5 million for the two carriers on a pro forma basis. Pan Am alone reported earnings of $37.1 million in the second quarter of 1979.
Second quarter operating loss was $45.3 million, compared with 1979 second quarter operating earnings of $26 million on a pro forma basis. Operating expenses were $917.1 million, with fuel — which accounted for 32 percent of Pan Am’s total operating expenses — up 81 percent to $296 million over the fuel costs of Pan Am and
National in the second quarter of last year. In June of this year, Pan Am’s cost for a gallon of fuel surpassed $1.00, to $1.01 a gallon, compared with 52 cents a year ago. Just 18 months ago, the company was paying 44 cents a gallon.
Excluding fuel, Pan Am’s operating expenses were up only 7.2 percent in the second quarter. But when fuel expense is included, total operating expenses jumped 23.6 percent.
“It is the dramatic increase in jet fuel prices, and Pan Am’s inability to put fare increases into effect rapidly enough to keep pace with these prices, that continues to impact our performance,” William T. Seawell, chairman and chief executive officer, said. “At the same time, the current economic environment is having a negative effect on
our traffic.”
Operating revenues in the 1980 second quarter were $871.8 million, up 13.5 percent over the combined carrier last year.
While legislation passed earlier this year finally authorized some fare increases beginning April 1, there continued to be a lag between the time of authorization and the time when Pan Am was able to implement those increases, particularly in international markets.
In addition, the recession in the U.S. had an impact on passenger traffic. Not only did traffic slow in the second quarter, but people who did fly were more likely to use lower fares or one of the many discount fares in the market. The effect was to hold down the increase in Pan Am’s passenger yield — the amount continued on page 8
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London’s Finchettes Drum Majorettes provided a star-spangled welcome for passengers on Pan Am’s L1011 nonstop inaugural flight from Houston to Gatwick Airport. The Stars and Stripes, Union Jack and Texas’ Lone Star Banner were followed by a brass band and Uncle Sam was on hand to present each of the 238 passengers with a Yellow Rose of Texas. (Story on page 7.)