Officials of Braniff International continue to talk with two unnamed airlines about a possible joint operating agreement that would allow Braniff to resume some flights, but hopes for such a revival are fading as a Sept. 10 court deadline for a reorganization plan approaches.
Sam Coats, Braniff's senior vice president-marketing, said yesterday that the possibility of working out an agreement is "a very long shot . . . I would not want any former Braniff employe to get his or her hopes up," he said. "The prospects are just not that great.
"We have not given up and we are continuing to talk and work toward getting a joint operating agreement, but the economy is working against us, the state of the industry is working against us, and time is working against us," Coats said.
Officials of the Dallas-based airline, which suspended service May 12 and filed for protection under federal bankruptcy laws the next day, at first suggested that a smaller, regional low-fare airline might emerge from the remains of the once worldwide carrier. But recently, they have suggested that an agreement with another carrier held out the best opportunity for putting some Braniff planes back in the air and some Braniff employes back to work.
Coats did not rule out the possibility that an independent Braniff could emerge but said that it would be "difficult" to get enough operating capital and Braniff may not be able to overcome a "public confidence cloud" it acquired before its suspension. "What would induce travel agents to book flights on us?" he asked, recalling that the sharp drop-off in travel agency bookings before this spring.
Braniff is seeking an agreement similar to the one it tried unsuccessfully to work out with Pan American World Airways. In that plan, Pan Am would have used some of Braniff's planes but they would have been painted in Pan Am's colors. Pan Am would have employed as many Braniff flight crews as possible and used Braniff's facilities in cities not served by Pan Am. All administrative functions would have been transferred to Pan Am.
Braniff has until Sept. 10 to subject a plan for reorganization to the bankruptcy court or to ask for an extension of time. If no plan is filed and no extension of time is granted, liquidation can follow unless the creditors themselves come in with a plan.
Meanwhile, Braniff has decided to discontinue operating its pension funds. Last Friday, Braniff asked a federal bankrupcty court to rule on the best method of disposing of the four plans covering 9,400 employes.
It also notified the Pension Benefit Guaranty Corp. of its intentions. PBGC, the government insurer that bears ultimate responsibility for the plans, may have to make up a $60 million shortfall in the funds' assets. The largest federal bailout to date occurred in November 1981 when PBGC laid out $60 million for the bankrupt White Motor Co.'s pension plan.
Despite the agency's aid, some of Braniff's former employes and retirees stand to lose a portion of their benefits because the maximum monthly payment paid by the PBGC is $1,380, or $16,500 on an annual basis.
Coats said, "What we've got is a situation where, if we had continued to make payments to people, we would have drained the funds assets. There would have been nothing left for employes who are fully vested now but do not reach retirement for 15 years."
A bankruptcy court hearing on the pension plans is scheduled for Thursday.