Pan Am Says All Its Suitors Got a Fair Hearing : Airlines: Chairman Thomas Plaskett said investor Kirk Kerkorian was one of them.
Pan Am Chairman Thomas Plaskett told Transportation Secretary Samuel Skinner in a letter last week that all bidders for the airline have been given fair consideration and that at one time it expected United Airlines to buy financially troubled Pan Am whole.
In a copy of an Aug. 2 letter obtained by Reuters, Plaskett told Skinner that Pan Am has solicited offers from airlines around the world since February, 1989, and that all have been given a fair crack at buying the carrier.
Those include industry giants United, Delta Air Lines Inc. and American Airlines, as well as Northwest Airlines, Trans World Airlines Inc. and investors Jay Pritzker and Kirk Kerkorian.
“I have never refused to take a phone call or meet with any airline to discuss proposals,” Plaskett said, adding that the two most important issues in the ongoing negotiations are price and the number of Pan Am employees that would be hired by the buyer.
Plaskett was responding to a July 31 letter from Skinner, asking that he consider all offers in good faith.
In a copy of that letter also obtained by Reuters, Skinner said significant transfers of international route authority are likely to be challenged by disappointed bidders.
“To facilitate expedited treatment of any proposed route transfer, Pan Am and its creditors should ensure that they have considered in good faith all reasonable offers for the assets in question,” Skinner said.
Plaskett said in the five-page response that Chicago-based United started a detailed examination of Pan Am shortly after the airline filed for Chapter 11 bankruptcy protection in January.
“In this process, Pan Am supplied whatever information United requested, including data on the Latin America division,” Plaskett said.
United is said to have offered $235 million for the Latin American division but recently withdrew its bid.
On Friday Pan Am said it would lay off 5,000 employees, about one-fifth of its work force, in coming weeks as it shrinks its schedule to try to stem losses.
The New York-based airline, which is struggling to survive, reported a profit of nearly $100 million for the second quarter, compared to a loss of $49 million a year earlier.
But without a large one-time gain from the recent sale of London routes and other assets to United Airlines, Pan Am would have reported a loss for the quarter.
Pan Am has set a definitive agreement to sell most of its transatlantic operations, the East Coast shuttle and other assets to Delta for $310 million. The two carriers Monday asked Skinner’s agency to approve the sale of most of the transatlantic routes.
As part of the deal, Delta has agreed to take on 6,000 workers and to consider investing in what remains of Pan Am, which would be mainly its Latin American operations.
TWA and American have proposed to buy Pan Am whole for $450 million, but only $30 million in cash would come from TWA.