Pan Am Getting Ready to Take Off Again, Execs Say
More than four years after it collapsed in bankruptcy, Pan American World Airways rolled out a freshly painted Airbus A-300 jetliner Thursday and executives promised to begin low-cost daily passenger service between Miami, Los Angeles and New York by the end of the month.
With its three leased planes--each emblazoned with the familiar blue Pan Am logo--company President Martin R. Shugrue Jr. said the reborn carrier will offer cross-country flights “with good food, full amenities and affordable prices.”
Shugrue, a former chief operating officer of the airline, said the new Pan Am will position itself in the marketplace between full-fare carriers such as American and United and no-frills airlines such as Carnival Air and ValuJet.
Pan Am’s certification by the federal government is pending.
Shugrue acknowledged the risks. Not only has federal scrutiny of all airlines increased since the May 11 Everglades crash of ValuJet Flight 592, but the failure rate for start-up airlines is about 80%. Nonetheless, Shugrue said that with its $40 million in capitalization and its alliances with several foreign airlines, “there’s no way we can miss.”
Pan Am will fly only A-300s, which are designed to carry 254 passengers, 24 of them in first class. The company has leased three identical jets, all built in 1983, from a Dutch firm, Shugrue said, and it plans to be flying nine aircraft by its second year of operation.
Pan Am has already trained 150 pilots and flight attendants, many of whom worked previously for Pan Am or for now-defunct Eastern Airlines. Maintenance, reservations and marketing services will be done by outside contractors.
Tapping into Pan Am’s rich aviation history and the spirit of Independence Day, company executives staged a flag-draped christening of the reborn company’s first aircraft at Miami International Airport. The ceremony took place in a historic hangar first built in 1927 in Key West, where the company was founded. The hangar was dismantled a year later and reassembled in Miami.
Before a crowd of about 1,000 that included Pan Am retirees and some of the 400 new hires, Kristina Trippe, granddaughter of Pan Am founder Juan Terry Trippe, and Lars Lindbergh, grandson of aviator Charles Lindbergh, tossed champagne over the nose of the aircraft named the Clipper America.
“Pan Am was the first air carrier to cross the Pacific, to cross the Atlantic and to fly around the world,” Shugrue said. “We have our place in history, and we are now taking our place in the future.”
Miami investor Chuck Cobb, who spent $1.3 million to acquire the name in Bankruptcy Court, is chairman of the new Pan Am. Another investor is Ivax Corp. Chairman Phil Frost. Although the company is based in Miami, Shugrue said he is considering headquarters in New York and Florida’s Broward County.
Shugrue has projected operating costs for Pan Am at 4.8 cents a mile, well below the industry average of 8.5 cents a mile. At the same time, he said, he is cognizant of the demand for attention to safety since the ValuJet crash, in which 108 were killed.
“We will staff our own maintenance supervisors, hire our own engineering department and have computerized record keeping,” he said.
What was once known as “the world’s most experienced airline” was grounded in 1991 after years of decline.
Over the years, the airline sold its landmark New York City building and its international routes before it eventually succumbed.
After Pan Am’s demise, Shugrue spent a year as president of Continental Airlines. Then for five years he was trustee of bankrupt Eastern Airlines, overseeing the sale of assets. His attempt to restart Eastern as a low-cost carrier failed.
