A New Pan Am
Speaking of start-ups, a reborn Pan American World Airways is back in the skies and Los Angeles will be a pivotal factor in whether the Miami-based carrier stays there.
The “new” Pan Am took off two months ago, and it’s trying to find a profitable niche flying between New York, Miami, Los Angeles, San Francisco and Puerto Rico.
The transcontinental routes are among the industry’s most competitive, with such giants as United and American jostling for customers. Moreover, most start-up airlines fail. But Pan Am’s chief executive, Martin Shugrue, contends that his airline can survive in that market.
How? By providing a familiar, brand-name airline that offers good service and fares that undercut its bigger competitors. Pan Am will also operate with much lower costs than its rivals, he said in a recent interview.
The old Pan Am collapsed in bankruptcy in 1991. Shugrue, a former executive of that company as well as Continental and defunct Eastern Airlines, joined with Charles E. Cobb--who had bought the Pan Am name and logo--to lead an investor group that launched the new Pan Am.
Shugrue said Pan Am won’t be profitable until its second year of business, but the airline is in solid financial shape because it has $40 million of equity and no debt.
Still, why would someone who endured the long and painful deaths of the old Pan Am and Eastern want to try again? Said Shugrue: “I’m infected with airline disease.”
James F. Peltz can be reached via e-mail at james.peltz@latimes.com
