Pan Am May Lay Off 2,800; Strike Possible
A Pan American World Airways union official said Tuesday that the airline plans to lay off about 2,800 workers--10% of its work force--and he raised the possibility of a strike if the layoffs occur.
William Genoese, who heads the airline’s International Brotherhood of Teamsters local, said his union was told of the impending layoffs last week during bargaining talks aimed at reaching a new contract. Further talks were scheduled for Tuesday night, he added.
Genoese said his union, which represents 6,500 of Pan Am’s reservation, passenger and supply clerks and cargo handlers, has had court permission to strike since 1988. The Teamsters at Pan Am have been working without a contract, and serious negotiations began only in July of this year, Genoese said.
“The U.S. Court of Appeals of the Second Circuit said on Feb. 21, 1988, that we could strike at any time,” he said in an interview. “This is our fight for job security. We want job security. That’s one of the major issues.”
He said about 600 of the Teamsters members would be among those laid off.
Genoese said Pan Am told the unions that rising fuel prices, resulting from the situation in the Persian Gulf, were behind the planned layoffs. Fuel prices have risen about 50% this summer, and Pan Am, which was already suffering financially, has been badly hurt.
The union leader said the airline planned to return three leased Boeing 747s to their owners in another move to reduce the work force.
Pan Am spokesman Jeffrey Kriendler declined to comment on Genoese’s statements. He noted that Thomas Plaskett, Pan Am’s chairman, is scheduled to address airline analysts in New York today. “Come to the meeting, and you’ll find out,” Kriendler said.
Genoese said sales and reservation clerks should not be laid off. “They are the ones needed most when business drops off,” he said. “They are the ones who hustle for the business.”
Pan Am has been in financial difficulties for years and, as a result, has sold many of its non-airline assets. These include its headquarters building in New York, its Pacific division and its routes to Berlin. Its lucrative Northeastern shuttle is also on the block.
Things have improved somewhat, however. Last week, Pan Am reported that during August it flew the most revenue passenger miles of any month in its history. (A revenue passenger mile is one paying passenger carried one mile.)
For the quarter ended June 30, Pan Am reported a net loss of $49 million, half of what it lost in the same period a year earlier.
Observers said the airline has no choice but to trim its work force going into the slow winter season. “They have to take this drastic action,” said Raymond Neidl, airline analyst with the New York investment firm of Dillon, Read & Co. “They have already sold the family jewels to raise cash. I think it is probably prudent to trim back the labor force going into the slow winter months. They need every bit of cash they can get their hands on.”
