NEW YORK, SEPT. 19 -- Financially troubled Pan Am Corp. said today that it will eliminate 2,500 jobs in the next 30 days to help reduce losses and respond to what has become a particularly treacherous airline market.
The job cutbacks make Pan Am the second major carrier to announce layoffs in recent weeks. Arlington-based USAir Group Inc. said it will eliminate 3,600 jobs as part of a general cost-cutting effort announced last month.
Both carriers are attempting to position themselves for what analysts say will be a difficult period for many airlines.
Hit hard by rising jet fuel prices, the airlines have been limited in their ability to pass those costs on to customers in the form of higher fares because of the weakness in the market for air travel.
Pan Am Chairman Thomas G. Plaskett made the announcement in a meeting today with the New York Society of Airline Security Analysts where he outlined the airline's plans for survival.
He estimated that the cutbacks, Pan Am's biggest since 1982, should save the money-losing carrier about $50 million to $60 million a year. Approximately 1,400 people out of a total work force of 29,000 are expected to lose their jobs. The others will be eliminated through a combination of attrition and by workers taking voluntary unpaid leave. No pilots will be furloughed as a result of the cuts but the reductions will affect both union and management employees, he said.
As part of its effort to scale back operations, Pan Am plans to downsize -- or "right size," in Plaskett's words -- the carrier's North Atlantic service and to increase service at its Miami hub and to Central and South America.
Plaskett said the potential sale of the Pan Am Shuttle and the proceeds from aircraft sale-leaseback transactions should be enough to get Pan Am through the winter, when the financial strains on the carrier are most severe.
Plaskett said he expects to have the framework of a shuttle sale in place by the end of the year, although he would not identify the potential buyer. America West Airlines is generally considered the most likely prospect among carriers, but there is some speculation that a non-airline investor might buy the equity and then contract with an airline to run the service, analysts said.
Plaskett said he is also exploring the possibility of either direct investment in Pan Am by a foreign carrier or a deal that would link a foreign carrier's routes to Pan Am's. The most logical candidates for such a deal are airlines that operate in the Pacific, including All Nippon Airways, Japan Air Lines or Korean Airlines, he said, but he declined to say whether he is in negotiations with any carrier.