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Aviation History
1991
1991 - 3287.PDF
IMUMnm INTERN Editorial Enquiries Editorial Fax Display Advertising Display Advertising Fax Classified Advertising Classified Advertising Fax Telex 892084 T I O N A L +44 (81) 661 3842 +44 (81) 661 3840 +44 (81) 661 3315 +44 (81) 661 8981 +44 (81) 661 6373 +44 (81) 642 4431 REEDBP G Subscriptions +44 (81) 649 7271 Back issues (recent copies only) +44 (81) 661 3315 Picture Library +44 (81) 661 3427 Flight Directories +44 (707) 46952 USA Newstrade Sales Enquiries 800 345 6478 LONDON Quadrant House, The Quadrant, Sutton, Surrey SM2 5AS, UK Editor Allan Winn Editor's PA Jacqueline Worsley Deputy Editor Forbes Mutch News Editor Andrew Chuler Features Editor David Learmount Military Editor Mike Gaines Air Transport Editor Ian Gonld Technology Editor Simon Elliott Databases Editor Tom Hamill Editorial Assistant Kate Sarsfield Design Editor Mike Wells Sub-editor Annabel Goddard Layout Sub-editor Jenny tong Technical Artist Tim Hall Technical Artist David Hatchard Technical Artist John Marsden Spaceflight Correspondent Tim Furniss Photographer (Europe) Mark Wagner +44 (81) 66 +44 (81) 66 +44 (81) 66 +44 (81) 66' +44 (81) 66' +44 (81) 66 +44 (81) 66' +44 (81) 66' +44 (81) 66 +44 (81) 66' +44 (81) 66' +44 (81) 66' +44 (81) 66 +44 (81) 66' +44 (81) 66' +44 (81) 66 +44 (237) Fax +44 (237) +44 (272) Fax +44 (272) 3852 3843 3845 8809 3834 3838 3096 3842 3828 3848 3847 8047 8047 8054 51756 51600 358200 358290 Display Advertisement Sales Sales Manager Clive Richardson Assistant Sales Manager Nick Wilcox Senior Sales Executive Janice Lowe +44 (81) 661 3315 +44 (81) 661 3892 +44 (81) 661 3316 Advertisement production Howard Mason +44 (81) 661 3267 EUROPE/MIDDLE EAST European Editor (Brussels) Julian Moxon +32 (2) 657 9689 Fax +32 (2) 657 5260 Munich Correspondent Douglas Barrie +49 (89) 689 1041 Fax +49 (89) 689 1045 Paris Correspondent Gilbert Sedbon +33 (1) 4825 5261 Israel Correspondent Arie Egozi +972 (3) 967 1155 Sales Director (France) Pierre Mussard +33 (1) 4277 1417 Representative (Italy) Romano Ferrario +39 (2) 58084 302 AMERICAS American Editor Graham Warwick F Washington Correspondent Kieran Daly F USA West Coast Correspondent (Los Angeles) Guy Norris Photographer (USA) Craig Schmilman fax President RBP (USA) Ray Barnes Traffic Manager JoAnn Lapp Fax . Vice President US Sales John Tidy Fax Sales Director (Mid West and Canada) Gene Glendinning Fax Sales Director (East Coast) Robert Hancock Fax Business Development Director Sheena Robbins Fax (404) 587 2927 (404) 594 1534 (703) 836 7443 (703) 836 8344 (714) 252 8971 (714) 252 8972 (310) 452 4464 (310) 452 3515 I (212) 867 2080 I (212) 867 2080 (212) 687 6604 I (714) 756 1057 I (714) 756 2514 I (708) 635 9920 I (708) 635 0602 (703) 836 7444 (703) 836 7446 (703) 836 7444 (703) 836 7446 ASIA/PACIFIC Asian Editor (Singapore) John Bailey +65 226 3188 Fax +65 227 1769 Australian Correspondent Paul Pbelan +61 (70) 532 791 Fax +61 (70) 532 791 Sales Director Mike Hancock (Singapore) Sales Executive Fiona Bartholomeusz Regional Representative (Japan) Shoichi Maruyama +65 226 3188 +65 226 3188 Fax +65 223 6960 +81 (3) 3234 2161 Fax +81 (3) 3234 1143 Publisher Les Edwards +44 (81) 661 3436 For full advertisement information see inside back cover Member of the Audit Bureau of Circulation COMMENT FLYING INSULTS In the land of litigation, lawsuits are flying where airlines are not. Courtroom insults have superseded billboard slogans as the US airline industry slides from self- promotion into mutual recrimination in the face of mounting losses. It is a sad truth that the time has come to bury Pan American World Airways, not to praise it — and certainly not to revenge its death by forcings-Delta to its knees. The refusal to keep pumping blood into a • body severed at the waist and bleeding to death, however cruel it might seem, can be a kindly act — doubly so for the donor. Delta did not put Pan Am on the critical list, Pan Am itself did that. Delta did not cut Pan Am in half, Pan Am's creditors did that. Delta did outbid others for the half offered up, paying a price that brought tears of pain to the eyes of its shareholders and tears of joy to those of Pan Am's employees and its creditors. That was Delta's mis take. The size and scope of its offer led Pan Am's workers to believe their future was secure and led Pan Am's creditors to believe their invest ment'was safe. Delta's reputation as a benevolent employer and a reliable earner obscured the fact that the airline was enduring the same recession that had accelerated Pan Am's downfall. Delta compounded the mistake by its gener osity: hiring more former Pan Am employees than it had agreed to; settling Pan Am's civil reserve air fleet obligations when the US Air Force threatened to foreclose; and agreeing to lend Pan Am $140 million to keep it alive until "Pan Am II" could be born — $80 million more than its original agreement stipulated. In the end it was Pan Am's management, and not Delta's, who decided that Pan Am II, if born, could not survive. Had they persevered, Pan Am was judged likely to perish in 1993, instead of 1991, despite receiving $450 million in Delta backing in addition to the $416 million already paid for Pan Am's Shuttle and European routes. N orthwest's refusal to rescue bankrupt Midway is less easy to defend than Delta's withdrawal of support for Pan Am." Delta paid a price for finally moving to protect itself by withdrawing support for Pan Am's re-organisation. The airline's reputation, its most treasured asset, has been damaged but the survival as one of the USA's big three must be judged more important. Whether the survival of debt-laden Northwest is judged more important than that of youthful Midway will depend on whether Northwest itself survives the next round of US airline consolida tion. Certainly North west's eleventh-hour refusal to rescue bank rupt Midway is less easy to defend than Delta's withdrawal of support for Pan Am. In the end, how ever, the name of the game is is survival. With Continental and America West in Chapter 11, TWA planning to seek bankruptcy protec tion early next year, USAir cutting costs in a bid to remain solvent, American, United and Delta warning of heavy year-end losses and only Southwest returning solid profits, the chances of a white knight emerging to rescue any ailing carriers looks remote — certainly not one with a North American accent. As American, United and Delta all have made substantial acquisitions from other carriers in the past year they may be unwilling or unable to buy what might be put on the table. It would seem that the only consolidation route now left is for debt-laden carrier to merge with debt-laden carrier to create megadebt-laden rhegacarrier. At this dark hour it seems possible that more US airlines will go under. It seems probable that their demise will be precipitated by the actions of other US carriers struggling to survive. The stakes have never been higher. After" the experience of 1991 it will be hard to finji,, visionary investors who believe the once-c^timistic predictions of traffic growth. It will not be hard to find predatory lawyers who believe the now-fatalistic predictions of litiga tion growth. Lawsuits will fly where investors fear to tread. • FLIGHT INTERNATIONAL 18 - 24 December, 1991 3
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