Group of Investors May Bid for Pan Am Shuttle
The former boss of Pan American World Airways’ Northeast shuttle is said to be assembling a group of investors to make a bid for the shuttle operation.
Bruce R. Nobles has met two or three times recently with Pan Am representatives to discuss a possible sale, but no agreements have been reached, said William Genoese Sr., director of the Teamsters union’s airline division. The Teamsters represent 6,200 Pan Am reservations agents, ticket takers, clerical workers and other non-flying personnel.
Nobles, reached at his home in New York on Friday, declined to comment.
Nobles is the second possible bidder to emerge for the shuttle, which money-losing Pan Am put up for sale in May. America West Airlines, based in Phoenix, would also like to buy it.
Pan Am wants $250 million for the shuttle, which hauls passengers between New York and Boston and between New York and Washington. The northeast air corridor is the nation’s busiest, with 3.7 million travelers annually.
Few people know the shuttle and its competition better than Nobles, who most recently served as president of the rival Trump Shuttle.
A personable executive with a flair for promotion, Nobles was fired from the Trump Shuttle in June when the airline came under pressure to reduce costs. It is owned by flamboyant New York developer Donald J. Trump, who is facing a severe cash squeeze at his New Jersey casino operations.
One problem any bidder for the Pan Am shuttle faces is financing. Banks have grown increasingly wary of financing leveraged buyouts; a union offer for the parent of United Airlines collapsed earlier this week because it lacked bank support.
America West is said to be looking for loans from companies other than banks, such as insurance companies and equipment manufacturers, to finance a possible acquisition of the Pan Am shuttle. It recently received a $150-million infusion from manufacturers and leasing firms as part of a $5-billion deal to lease or buy 118 Airbus Industrie airliners.
America West has said some of that money could be used to buy the shuttle.
