Pan Am Blames Recession in Reporting Huge Losses

Pan Am Corp., one of the nation’s most troubled airline companies, said Friday that it suffered devastating losses during 1990 and the first quarter of 1991, when it landed in bankruptcy court.

But the cash-strapped parent of Pan American World Airways said its short-term financial outlook appears stable enough to let it survive the summer, while it discusses selling some assets to United Airlines or the entire company to Delta Air Lines.

Pan Am’s losses were made worse by the higher fuel prices and drop in traffic brought on by the Persian Gulf crisis, as well as the recession. The earnings report had been delayed because of the bankruptcy filing.

Pan Am said that for the fourth quarter of 1990, it lost $394.1 million, compared to losses of $178.3 million for the same period a year earlier. That brought Pan Am’s losses for all of 1990 to $662.9 million, compared to losses of $336.6 million in 1989.

During the first three months of 1991, Pan Am lost $249.2 million, compared to a loss of $190.7 million for the same period a year earlier.

Pan Am Chairman Thomas Plaskett said that after Pan Am suffered huge losses in the fall because of higher fuel prices and the recession, the drop in traffic brought on by the outbreak of war in January was “immediate and devastating.”

Pan Am’s losses for the fourth quarter of 1990 were $2.48 per share on revenue of $828.1 million, compared to losses of $1.21 per share on revenue of $832.6 million in the same quarter of 1989. The losses for all of 1990 came to $4.36 per share on revenue of $3.917 billion, and compared to losses of $2.31 per share on revenue of $3.561 billion a year earlier.

In the first quarter of 1991, Pan Am lost $1.53 per share on revenues of $631.9 million, compared to a loss of $1.29 per share on revenue of $782.0 million in the same period of 1990.

Pan Am has been in trouble for years, but it has been gaining temporary cash infusions by selling bits and pieces of the airline.