Braniff International officials will begin negotiations with each of the airline's five labor unions on Monday in an effort to secure quickly the new contracts they say are necessary to go forward with a joint airline venture with PSA Inc., the California-based airline.
"We are very hopeful that, with folks on the street, they would be willing to give tremendous productivity increases and wage-rate decreases in order to get this thing started," Braniff Chairman Howard D. Putnam said today.
In an interview in one of the few remaining open offices at the sprawling Braniff headquarters at Dallas-Fort Worth Regional Airport, Putnam said that he hopes to have signed contracts from the unions within a couple of weeks. "We recognize that's very rapid, but this is also a very unusual situation," he said.
Putnam said that he would like to have the contracts in hand by Nov. 16, when Braniff officials must appear before federal bankruptcy Judge John Flowers to seek another extension on the deadline for submitting a reorganization plan for the grounded airline. A few days later, the PSA board of directors is scheduled to meet to discuss progress of the venture, he said.
PSA executives won't go forward with the joint venture unless Braniff "brings along" a cost structure that would provide airline service at less than six cents per available seat per mile, Putnam said, a cost that would be one of the lowest in the airline industry. Braniff's seat-mile cost was 7.2 cents when it ceased operations in May.
None of the unions have seen Braniff's contract proposals yet, and Putnam wouldn't disclose them other than to say that a profit-sharing plan would be included.
"I will look at anything they'll present, anything to get employes back to work," said Jerry Emmel, who will represent the International Association of Machinists and its 1,500 mechanics and engineers. "I'm not going to give away the farm, though," he said, adding that his members would not work "for nothing."
Under the outlines of the joint venture, Braniff would provide between 25 and 30 of its grounded Boeing 707s, a minimum of 1,500 of its idled employes, and its facilities and landing rights at airports to be served. The venture would operate under PSA's name and use PSA marketing, reservations system and clerical functions, although some Braniff reservations agents would be retained.
M. Philip Guthrie, Braniff's chief financial officer, said the exact legal structure of the venture hasn't been determined; it could be a corporation, partnership or contractual arrangement. But both Braniff and PSA would contribute start-up capital to the venture--Braniff has $20 million in cash on hand--and they would split the profits.
Braniff's "profits" would be distributed among its creditors according to a schedule developed under the reorganization plan. All the creditors, who are owed a total of $1 billion, will have to agree to the plan.