Pan Am, Northwest’s Parent Say Higher Costs Behind Losses

Pan Am Corp. and the parent of Northwest Airlines on Friday reported losses for the first quarter that they said were caused by higher costs.

New York-based Pan Am, the eighth-largest airline, said its first-quarter net loss narrowed to $83.3 million from $93.6 million a year earlier.

Revenue jumped 18%, to $900.8 million from $763.1 million in the first three months of 1987.

St. Paul, Minn.-based NWA Inc., which operates Northwest, said it had a first-quarter net loss of $43.5 million, widened from a loss of $35 million in the year-ago period.

The loss occurred despite an increase in first-quarter revenue, to $1.24 billion from $1.17 billion a year earlier.

Pan Am said an improved performance by its Northeast shuttle service and Pan Am World Services helped narrow its loss from a year earlier. The air shuttle links New York, Boston and Washington, and Pan Am World Services provides ground services to other carriers around the world.

The company’s main subsidiary, Pan American World Airways, posted an operating loss of $62 million in the first quarter, widened from a $51.1-million loss a year earlier. The deterioration was blamed on increases in the costs of fuel, advertising, aircraft rentals and other expenses.

The loss at Northwest, the fourth-largest U.S. airline, was attributed to rising costs and a strike threat by flight attendants. The company said earnings also were affected by a $10-million one-time writedown of accounts receivable from a travel wholesaler.