Two-Thirds of Pan Am’s Flights Canceled by Strike
Thousands of passengers were forced to seek seats on other airlines Thursday as mechanics and baggage handlers walked off their jobs at Pan American World Airways, causing the financially ailing company to cancel more than two-thirds of its regularly scheduled flights.
The Transport Workers Union, which represents 5,700 Pan Am employees, set up picket lines at airports from Honolulu to Miami, and those lines were honored by four other unions that represent 14,000 Pan Am workers--pilots, flight attendants, engineers and other ground-service personnel.
Passengers with Pan Am tickets were being directed to other airlines. At the Eastern Airlines terminal at Los Angeles International Airport, ticket agent Sandi Geffner said she was handling a number of requests from Pan Am passengers.
“It’s very much busier today than usual,” she said.
Passengers Rerouted
Sung Hong, an American Airlines agent at Los Angeles International, said he had rerouted 150 Pan Am customers headed for Boston onto American planes that were to take them to their destination by way of Chicago.
Mike Bikalos, a union vice president, said the walkout has virtually grounded the company.
But the airline, which carries an average of 39,000 passengers a day, claimed that it was having some success at operating despite the strike. Pan Am spokesman James Arey said 60% of the international flights--125 of the 190 scheduled--were completed Thursday. Only one of 210 domestic flights was able to get airborne, however, and Arey said there will be no domestic operations today.
No negotiations are scheduled, and John Kerrigan, chief negotiator for the transport workers, said “a very lengthy strike” is likely because the two sides are far apart on major issues.
Pan American Chairman C. Edward Acker said in a prepared statement that the company is “eager for an expeditious settlement, but to give in to TWU demands would seriously jeopardize Pan Am’s financial recovery.”
Pan Am has not made a profit since 1980 and lost $206.8 million in 1984. It was the only one of the nation’s 11 major carriers that did not improve its 1984 financial position over 1983’s.
“A long strike can kill Pan Am,” said Mark Kahn, a professor of economics at Wayne State University in Detroit who follows the airline industry.
Asked whether he is worried about the effect a strike would have on the company, Kerrigan said, “I believe Pan Am has been preparing for this strike for six to seven months and is well prepared financially to handle it.”
One airline analyst agreed with Kerrigan on this point.
“I estimated the company would lose $75 million in the first quarter anyway,” said John Pincavage of Paine Webber, a New York-based securities firm. “If there was a time you were going to take a strike, this is a good time.”
Effect on Advance Bookings
He cautioned, however, that “the danger is that if it goes on too long, it can begin to affect advance bookings for the second and third quarters of the year--traditionally the only quarters they make money.”
Wednesday night, Pan Am offered transport workers a 20% wage increase over 36 months, Kerrigan said. He said the company also offered mechanics an immediate $1,200 bonus and offered a $900 bonus to other bargaining unit employees.
He said the offer was unsatisfactory. Kerrigan said the union also is opposed to Pan Am’s demands for more part-time workers, the creation of a new salary scale that would pay newly hired workers up to 50% less than current employees, reductions in pension and health benefits and significant work rule changes.
According to an industry source, a Pan Am mechanic earns a top base salary of $29,500 a year and a mechanic at United Airlines earns $39,600. Baggage handlers earn $23,800, compared to $31,600 at United. But the Pan Am wages are considerably higher than those at non-union carriers, the source said.
Kerrigan, the union leader, also noted that Pan Am workers agreed three years ago to give up 14% in wages and to have them restored in phases by the end of 1984. That did not happen, however, and last Dec. 26, the Air Line Pilots Assn. won a court order requiring a “snapback” of the wages. The company has appealed the decision.
Pension-Plan Freeze
Another management action that aggravated the workers was Pan Am’s decision last August to unilaterally freeze worker pension plans.
“I’m not of the die-hard union camp, but the company has driven us to the die-hard union camp,” said Bernie Sherwood, a mechanic with 24 years of experience with Pan Am who was picketing Thursday at Los Angeles International. “We haven’t had a pay raise since 1981, and I’m living from paycheck to paycheck.”
George Miranda of the Teamsters Union, which represents about 6,000 Pan Am passenger service agents and reservations personnel, said: “Labor relations at Pan Am have deteriorated to an all-time low. They’re absolutely not sensitive to working people.
“We’ve had no wage increase since 1981, and they want to reduce vacation, take back holidays, make us pay some of the health insurance and hire more part-timers.
“We’re not anti-Pan Am,” Miranda said. “We’ve given; we want Pan Am to survive. But the management at Pan Am has no operating or marketing plan.”
The Teamsters are one of four unions honoring the transport workers’ picket lines. Like the other unions, the Teamsters have been operating without a contract since Dec. 31. Flight attendants and engineers also have been operating with expired contracts.
On Tuesday, the Airline Pilots Assn. reached a tentative settlement with the airline, including a major concession enabling the airline to stretch out deferred raises over the 32 months of the agreement. The raises amount to 25.7%, according to industry sources.
Pilots Will Stay Away
On Thursday, Henry Duffy, president of the pilots’ union, said his union will honor the Transport Workers picket lines. “Pan Am pilots recognize that the airline cannot be rebuilt without fair and equitable settlements for all employees,” he said. “A unified labor front is the only way airline employees can deal effectively with management in today’s deregulated environment.”
The pilots’ announcement was particularly significant because “there has been a history of non-cooperation and even antagonism among the unions in the airline industry,” said Charles Craypo, professor of economics at Notre Dame University.
Times Staff Writer Lenore Look also contributed to this story.
