Although its net losses in 1981 were cut substantially by proceeds from the sale of tax benefits and its hotel subsidiary, Pan American World Airways yesterday reported a staggering 1981 operating loss of $348.4 million, the equivalent of nearly $1 million a day.
As a result, Pan Am Chairman C. Edward Acker announced yesterday that the airline would cut its management staff by about 200 and ask its management employes in New York to extend their work day and halve their vacation time.
The company also said it will meet soon with its union leaders to discuss ways in which its unionized employes, most of whom already have taken a 10 percent wage cut, could contribute further to productivity improvement.
"Our continuing losses make it essential that we immediately take further steps to improve our cost structure," Acker said. The former chairman of Air Florida joined Pan Am on Sept. 1 with a mandate to save the foundering giant from bankruptcy.
For the year, Pan Am reported a net loss of $18.8 million compared with net income of $80.3 million ($1.13) in 1980. The 1981 results were affected favorably by a $364.2 million pretax gain on the sale of Intercontinental Hotels Corp., its wholly owned subsidiary, and an $82.2 million gain from the sale of tax benefits. The 1980 results were affected favorably by a $294.4 million gain on the sale of the stock of Grand Central Building.
In the fourth quarter of 1981, Pan Am's net loss was $82.7 million compared with earnings of $196.9 million ($2.66) in the same quarter of 1980. Last year's fourth-quarter loss was after the $82.2 million gain from the sale of tax benefits.
Pan Am's $348.4 million operating loss in 1981 widened significantly from the $120 million operating loss in 1980. The operating loss also widened in the fourth quarter. Pan Am had an operating loss of $125.2 million in the 1981 October-December period compared with an operating loss of $58.2 million in the 1980 period.
The work-force reductions announced yesterday affect employes who work in non-revenue-producing staff functions, such as the airline's legal, financial, public relations and labor relations offices.
Jobs considered directly related to the production of revenue, such as flight operations, reservations and sales, are not affected. A Pan Am spokesman said the airline is downgrading five current vice presidents and eliminating the job of another. Six currently authorized vice-president positions are vacant and won't be filled, he added.
Overall, the reduction will leave Pan Am with about 3,300 management employes by the end of February, the spokesman said.
The work day for management employes assigned to the New York headquarters will be extended from eight to 10 hours, and all management employes' vacation time will be cut in half, the airline said.
Pan Am said the airline's salaries and benefits expenses, which accounted for 32.6 percent of the airline's total operating expenses, increased 4 1/2 percent during 1981. During the fourth quarter, a 10 percent wage reduction program was in effect for all management personnel and employes of four of Pan Am's five unions. Last year, Pan Am laid off 3,680 employes.
In the fourth quarter, Pan Am's passenger traffic was up slightly, and it filled 61 percent of its seats, an improvement over the year-earlier period. But, partly because of lower fares, it needed to fill almost 78 percent of its seats to break even, up from 68 percent a year earlier.