Pan Am’s Loss in Quarter Widens to $138.7 Million

Pan American World Airways said Thursday that its first-quarter loss widened to $138.7 million from a loss of $70.3 million a year earlier because a monthlong strike curtailed operations of its Pan American World Airways unit.

Operating revenue fell 22.3% to $682.9 million from a year earlier, mostly as a result of the March walkout by the Transport Workers Union, which reduced Pan Am’s flight schedules to about a third of normal capacity.

“We are now taking steps to quickly rebuild our traffic through new marketing and pricing initiatives and have expanded our summer schedules in anticipation of heavy demand, especially to Europe,” Gerald Gitner, Pan Am’s vice chairman, said in a statement.

John Pincavage, an industry analyst for the investment firm Paine Webber, said that the loss was slightly larger than he had expected but that he expects Pan Am will narrow its loss for the full year from the $206.8 million it lost in 1984.

“They’re making progress,” Pincavage said.

He noted that a contract agreement with flight attendants in April permits the airline to hire new attendants at lower starting rates than prescribed in the old contract.

He also noted Pan Am’s agreement to buy 28 Airbus Industrie fuel-efficient jets for delivery by 1990. In the meantime, Pan Am is leasing 16 of the European-made planes.

Pan Am also announced in mid-April that it had agreed to sell its Pacific operations to United Airlines. Pan Am would receive $750 million from United for the routes.

The deal, however, must be approved by the federal government and the President because it involves international routes and possible antitrust questions.

For the first quarter, Pan Am said the airline had a pretax loss of $141.6 million, compared to a pretax loss of $74.8 million a year earlier. Airline revenue fell 25.8% to $584.8 million.

Pan Am said the drop in revenue in the first three months of the year was only partially offset by a 15.1% decline in expenses to $708.2 million.

Popular Toy Lineup Boosts Mattel Profit to $23 Million

A lineup of extremely successful toys pushed Mattel to a $23-million first-quarter profit, compared to a net loss of $7.3 million in the year- earlier quarter.

The Hawthorne toy manufacturer said sales jumped to $227.4 million in the quarter ended March 30 from $127.6 last year, largely on the strength of its Masters of the Universe male-action toys, Barbie fashion dolls and Rainbow Brite dolls and accessories, which were introduced in mid-1984.

The loss last year reflected weak toy sales and interest charges of $15.4 million on a $349-million short-term debt. This year, the firm carried no seasonal debt in the quarter and incurred interest charges of only $6.7 million, a spokesman said.

Net income also included $8 million of extraordinary tax credits from net operating loss carry-forwards, compared to $1 million last year.

Operating profit in this year’s quarter reached $34.9 million, an increase of $26 million over last year’s first quarter, due mainly to the higher level of sales.

The company said the increase in sales for the first quarter was due partially to its program developed to ship products earlier in the year.

The company anticipates that second-quarter income before extraordinary items will be somewhat lower because interest expense will again be higher.