Financially ailing Pan American World Airways announced a realignment of its route structure yesterday that will reduce its overall foreign and domestic flying by about 10 percent, suspending service from some airports altogether.
"Our number-one priority is to do the things necessary to put the company in a position to survive and prosper," William H. Waltrip, the new president of the company's airline division, said. The airline had an operating loss of $92.3 million in the first quarter of 1981, following a $127 million operating loss in 1980.
"We are . . . in some substantial trouble at the moment," Waltrip told a news conference in New York. "Something must be done about it."
Waltrip said the fundamental strategy will be to concentrate on routes that will capitalize on Pan Am's traditional strengths, maintain the airline's global image and develop U.S. domestic feed to the global system.
On the domestric side, the new operational plan, to take effect by the fall, includes suspending all service from New York's LaGuardia Airport and airports in Newark, N.J.; Mobile, Ala., and Pensalcola and Melbourne, Fla.
It also entails strengthening the airline's nonstop cross-country services across the northern and southern tiers of the country, cutting back on flights between the Northeast and the South and concentrating its services from Washington and New York (JFK International Airport) to south Florida, expanding the airline's hubs at Miami and Houston, and adding some domestric flights from interior cities to feed its international flights from New York, Miami and West Coast cities.
Plans for overseas include a reduction of service to Australia, Guam and Manila, some capacity cutbacks to Hong Kong and Singapore, ending service to Turkey and maintaining service to Poland only during the summer season.
Pan Am's strategy calls for increased emphasis on a number of key foreign destinations, such as Tokyo, Paris, Mexico City, Caracas, Rio de Janiero and Buenos Aires. Services to the United Kingdom and West Germany will be strengthened and services within West Germany will be upgraded. The airline also plans to begin new service to the Arabian Gulf area.
Pan Am has begun talks with its five unions, and expects that the retrenchment in operations will require the layoff of about 10 percent of the company's 33,000 employes, Waltrip said, adding that Pan Am also will seek to sell up to $200 million of its assets, including as many as six wide-body aircraft.
"As difficult and as sweeping as these tasks might appear, we are resolved to put together an airline that deploys our assets, our fleet and our employes in a manner which makes sense for Pan Am," Waltrip said.
The news conference was Waltrip's first since being named by the board of directors last week to run the airline.