The board forces Seawell to leave the afflicted airline
When he took over from Najeeb Halaby as chairman and chief executive of Pan American World Airways almost a decade ago, William T. Seawell brought with him a sparkling resume. A graduate of both the U.S. Military Academy and Harvard Law School, Seawell rose to Air Force brigadier general and was commandant of cadets at the Air Force Academy before switching to business in 1963. He then held top posts at American Airlines and the U.S. subsidiary of Rolls-Royce Ltd. But in 1980, after a promising few years during which he pushed Pan Am's airline operations into the black for the first time since the 1960s, Seawell ran head-on into trouble.
Last week, with the airline losing about $1.3 million a day after a bleeding first-quarter loss of $114.5 million, Pan Am's board reached a "mutual consensus" that Seawell must go. He will retire by Jan. 1 at age 63, more than a year sooner than he had desired.
Seawell's successor was not named, al though high on the list of possibilities will be William Wai trip, 43, a seasoned Pan Am executive who has been promoted to president. The post had been vacant since last November when Dan A. Colussy, 50, was ousted after a series of battles with Seawell. The job would have been filled sooner, but there were few eager takers.
Said one Pan Am official: "The really good people didn't necessarily want it be cause the airline is in something of a mess." Seawell himself had interviewed A.L. Feldman, the president of Continental Airlines, and Edwin I. Colodny, the chairman of USAir, in an apparent attempt to pick his successor, only to be rebuffed at the time by both men.
Pan Am had a profit of $80.3 million in 1980, but only because it earned $294.4 million from the sale of its 59-story Manhattan office building atop Grand Central Terminal. Wall Street cynics wisecracked that it might have been better to sell the airline and keep the building.
The airline's decline has been relentless. It was hit with the problems that face the whole industry: soaring fuel costs caused by higher oil prices, sharply increased competition from subsidized foreign airlines and the start of deregulation of the U.S. airline industry. Saddled with older, fuel-guzzling airplanes, oppressive union wages and losses on most of its long-distance hauls because of the sluggish world economy, Pan Am's fortunes sank.
Although the company's nonairline activities, including Intercontinental Hotels and management of airports in the Middle East, continue to make money, its airline operations are losing heavily. The company's debt as of March stood at $1.4 billion, and interest payments on loans last year were $132.6 million.