Pan Am Profit Sags in Quarter

Pan Am Corp. said Tuesday that third-quarter earnings tumbled 74% from a year ago, partly because of a decline in transatlantic air passengers and the sharp depreciation of the dollar.

But the parent of Pan American World Airways, one of the nation’s oldest airlines, said in an earnings statement that results of the 1986 and 1985 third quarters were difficult to compare because operations last year included Pan Am’s Pacific division, which has since been sold to United Airlines.

New York-based Pan Am said it made $5.5 million in the three months that ended Sept. 30, compared to $21 million a year earlier. Revenue totaled $888 million, down 13% from last year’s $1.02 billion.

“This year’s financial results were impacted by weaker-than-expected airline traffic on transatlantic routes, due primarily to the American public’s concerns over terrorism abroad,” the statement said.

Fear of terrorist attacks has depressed the business of several major international carriers this year, including Trans World Airlines and British Airways. Terrorists seized a Pan Am jumbo jet in Karachi, Pakistan, on Sept. 5. (They were captured after a bloody shoot-out with security police.)

Pan Am’s third-quarter results also were affected by a $12.4-million loss in foreign currency transactions, most related to Japanese yen-denominated debt, the company said. The yen has gained sharply in value over the dollar this past year, thereby raising the cost of interest payments.

Pan Am said third-quarter earnings were helped by a sharp drop in fuel prices. The company’s World Services division, which provides aviation and security services, also reported a 35% increase in earnings, to $3.3 million from $2.4 million.

For the first nine months of 1986, Pan Am said it lost $265.28 million, compared to a $189.68-million loss a year before. Revenue fell 13% to $2.24 billion from $2.56 billion in 1985.