Transportation Chief Backs Sale of Pan Am Division to United

Transportation Secretary Elizabeth Hanford Dole today tentatively approved the purchase of Pan American World Airways’ Pacific division by United Airlines despite protests from air carriers who fear United’s rise as a major international carrier.

The $750-million purchase must still clear final approval by the Transportation Department and could be overturned by President Reagan, although that is considered unlikely.

United also must still receive landing rights from various Asian countries, including Japan, which may demand some concessions from the United States in return, according to industry sources.

Dole disputed contentions by a number of airlines, including Northwest Orient, American, and Eastern, that the deal would harm competition across the lucrative market linking the United States and Asia.

United’s acquisition of Pan Am’s routes across the Pacific “will not result in substantial lessening of competition as it currently exists,” Dole said.

Once given final approval, the deal will mark the withdrawal of Pan Am from the Pacific, where the airline made aviation history in the 1930s with its “China Clipper” and in ensuing years inaugurated U.S. air service to such places as Japan, Singapore, New Zealand and Australia.

The two airlines announced the deal last April. It calls for United to pay $750 million in cash for 18 Pan Am jumbo jets and facilities in the Pacific, and to absorb about 2,700 Pan Am employees, including 410 pilots.