Advertisement

Pan Am to Cut Its Fleet, 2,500 on Staff : Aviation: The ailing carrier is buffeted by a slower economy and higher fuel prices.

Share
TIMES STAFF WRITER

Pan Am World Airways confirmed Wednesday that it plans major layoffs next month and said it will dispose of 15 leased airliners in an effort to cut losses resulting from the downturn in the economy and fuel price increases generated by the Persian Gulf crisis.

Thomas Plaskett, chairman of Pan Am Corp., the airline’s parent, said 2,500 workers would be furloughed in October in a move that will save the ailing company $50 million to $60 million annually. In an effort to cut operations on the Atlantic, Pan Am will also return to a leasing company five Boeing 747s. In addition, the airline would return 10 Boeing 727s.

The head of Pan Am’s Teamsters union local had said Tuesday that he understood that 2,700 people would be laid off and three leased 747s would be returned.

Advertisement

Plaskett said no cockpit crew members would be laid off. Many of the workers being let go were hired relatively recently, Plaskett said. As a result, the airline, which has a total work force of 29,000, will incur little in severance expenses.

About 500 flight attendants already on voluntary layoff are included in the 2,500 total staff reduction, Plaskett said. Although the airline had contemplated such layoffs for some time, Plaskett said, the fuel crisis had made the action even more necessary. He said Pan Am was paying 94 cents a gallon for jet fuel, compared to 61 cents during the summer.

Plaskett said that despite earlier forecasts, Pan Am would not make a profit in 1990. “We are in a recession,” he said. “The travel industry is in a recession now.” Besides the fuel price increase, Plaskett complained of other costs, including higher health insurance premiums for employees and higher user fees at foreign airports.

He said negotiations are being held with several parties for the sale of Pan Am’s moneymaking Northeastern shuttle operation. Although he expects to make an announcement this year, he indicated, the deal would not be consummated until next year.

Separately, it was learned that Phoenix-based America West Airlines, a carrier that has expressed interest in buying the shuttle, is no longer in talks with Pan Am.

Plaskett also said Pan Am is talking with a number of foreign airlines in an effort to forge some kind of cooperative agreement, but he would not name any of the prospective partners.

Advertisement
Advertisement