Delta Infusion May Keep Pan Am in Air

Delta Airlines on Thursday said it may invest in ailing Pan American Corp. as part of a plan that would allow Pan Am to emerge from bankruptcy court as a scaled-down carrier flying primarily to Latin America.

The proposal, which is being negotiated, would save Pan Am from liquidation and prove a serious blow to United Airlines, which had sought to buy the carrier’s lucrative Latin American routes. On Wednesday, Pan Am and its creditors turned down United’s bid for Pan Am’s Latin American routes because the offer was deemed insufficient.

Last week, Delta offered $260 million for Pan Am’s transatlantic routes, Northeast shuttle and numerous planes. Delta’s investment in Pan Am is contingent upon the approval of last week’s offer.

The companies would not reveal the amount of Delta’s investment but said the plan included other investors as well. Jeffrey Kriendler, a Pan Am vice president, said these investors would include airline and non-airline entities, but he declined to identify them.

“This will enable Pan Am to become a profitable company,” Kriendler said. “It would be viable on its own.”

Under the plan, Pan Am would keep flying its Latin American routes primarily from its Miami hub. Marketing arrangements would allow passengers to make connections between both carriers, and Pan Am and Delta would share a frequent-flier mileage program.

Thomas G. Plaskett, Pan Am’s chairman, said the “approach will provide the best possible results for all of Pan Am’s constituencies and assure our ability to continue to offer high-quality air transportation service.”

However, some industry analysts were skeptical about Pan Am’s chances under the proposal. Pan Am filed for bankruptcy protection in January after a decade long decline.

“I think it is now highly debatable that what would be left of Pan Am would be a viable stand-alone company,” said Edward Starkman, an analyst with Paine Webber.

Furthermore, the attorney for Pan Am’s creditors said talks with United should be continued. United declined to comment.