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Aviation History
1981
1981 - 2799.PDF
Pan Am pays high price for life-saving loans PAN AMERICAN is now taking drastic measures to obtain the credit that it needs for survival while it reorganises. The major US carrier is to cancel orders for eight new Boeing 727s, defer delivery of two Lockheed TriStars, and mortgage and second- mortgage nine of its McDonnell Douglas DC-lOs. It has just sold its highly profitable Intercontinental Hotels subsidiary to the British Grand Metropolitan group for $500 million. All this is to satisfy a Citicorp-led banking group which will provide Pan Am with a $200 million revolving credit deal from September 11. The airline is to accept the loan at 78 of a percentage point above the Citicorp prime 20'2 per cent interest rate. The bankers' demands do not stop there: they say that four out of five of Pan Am's unions must accept the airline's 10 per cent pay cut and "stabilisation" proposals. Leaders of four unions—which represent the whole spectrum of Pan Am's em ployees, from ticketing staff to pilots —now recommend that their members accept. The proposals call for a pay cut from September 1 and a wage freeze imposed until the end of 1982. Members of the four unions now have to decide by vote as to whether they will accept their leaders' recommenda tions; if they do, they will receive amounts of stock equal to their lost wages under a new employee owner ship plan. Ballot procedures will take several weeks. The banks have conceded a relaxa tion in the airline's debt/equity ratio, but Pan Am must make a similar deal with some of its institutional lenders by the end of this month or it will be in default on the loan agreements. This default would normally trigger repayment obligations. The Pan Am group has made a loss of $217 million in 1981's first six months. Much of its present misfor tune is ascribed to its expensive acquisition ($400 million) of National Airlines early last year. People... O David Dorman is appointed public relations manager for British Aero space, Scottish Division. Previously chief press officer at BAe Weybridge, Dorman's new position will include responsibility for the Jetstream 31. • US cargo company Emery Air Freight has appointed James Brown as executive v-p. Joining Emery as senior v-p and chief financial officer is Denis McCarthy. • Former test pilot and Lockheed executive Donald Segner has been ap pointed associate administrator for policy and international aviation in the US Federal Aviation Administra tion. Q Singapore Airlines has appointed George Chan as deputy managing director for the airline. His previous position as senior v-p USA is to be filled by Michael Tan, former regional director for Asia. D James McKenney has been elected to New York Air's board of directors. McKenney is a professor at the Har vard Business Administration School. • LOT Polish Airlines has appointed former deputy director Bronislaw Klimaszewski as its new director for the airline, replacing Wlodzimierz Wilanowski. D AVM Ian Pedder is to join the Civil Aviation Authority Board for a three- year period beginning September 1, 1981. He is currently deputy- controller, national air traffic services (NATS) and his appointment to the CAA Board will coincide with his ap pointment as controller NATS and promotion to Air Marshal. Q Johannes Einarsson has been ap pointed vice-president, maintenance and engineering for Cargolux. •' Edward Swearingen has been appointed executive vice-president engineering, research and develop ment for Texas-based Fairchild Swear ingen Corporation. D Air France's president Pierre Giraudet has been re-appointed presi dent of the airline for a further three years. Giraudet is also president of lata this year. FLIGHT International, 29 August I9BI wBBBBBBBBBBBBmB Bill Australian carrier Ansett Airlines' first 727-200 is the 4,000th jet airliner to be delivered by Hoeing; Ansett has four on order. According to Boeing, the 197,7001b gross taxi weight and JT8D-IS engines of their aircraft will allow them to fly non-stop from Sydney to Perth with full loads in either direc tion at any time of year Short hauls ... • Indian Airlines has increased its domestic passenger fares by 5 per cent. The fuel surcharge has also risen by 7 per cent, and the airline may revise its rates for freight opera tions. • Air India reports a £770,000 profit for the last quarter of the financial year ending March 31. The airline's loss for 1980-81 was £11 million. D US air cargo carrier Flying Tigers has begun operating a weekly non stop, direct cargo service from Chicago to London using Boeing 747s. • A LOT Polish Airlines An-24 on a domestic flight from Katowice to Gdansk was hijacked and forced to land at Tempelhof, West Berlin. Hijacker Bernard Pietka, who decided to hijack the aircraft while on mili tary service, was armed with a grenade and single-shot pistol. He is expected to be jailed for five years under West German law. The 50 pas sengers on board were flown on to Gdansk. • Cargo forwarder Hill & Delamain has been forced to close part of its Manchester-based subsidiary, Pelican Air Transport, because of poor trade and the weakness of the British pound against dollar-priced fuel. Pelican is to cease its aircraft operating activity, but will continue to sub-charter a Boe ing 707 to serve its main routes. Short hauls ... D The US Air Transportation Associa tion has reported that domestic and international scheduled airline traffic declined by 5-7 per cent in the first half of 1981, and air travel in June decreased by 5-1 per cent compared with the same month last year. • Texas - based international elec tronics and services company Tracor is to takeover Aero Spacelines for $9 million. Aero Spacelines will operate under its current manage ment as a subsidiary of Tracor in the Tracor Aerospace Group. D British Caledonian has now ob> tained almost 25 per cent of the London-Hong Kong freight market after just one year on the route. BCal began operating to Hong Kong on August 1, 1980, and has since carried 74,042 passengers and has achieved an average of 76 per cent load fac tors, the highest figures recorded on the route. BCal plans to introduce a fifth weekly service from October. D American Airlines is to introduce a daily DC-10 service between New York and Antigua via St Maarten in October. D Manchester International Airport's cargo operations are to decrease by 20 per cent following US Northwest Orient Airlines' decision to transfer its freight operations to Gatwick Air port from September. 609
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