ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, January 31, 1996 TAG: 9601310075
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
THE PIONEERING CARRIER that was first to fly around the world will be resurrected as a low-fare carrier.
Pan American World Airways, an airline whose name was nearly as well known as Coca-Cola's, will be resurrected this summer as a low-fare carrier based at New York's Kennedy Airport, an investor who is leading the venture said Tuesday.
The old Pan Am, the pioneering carrier that was first to fly the Atlantic, the Pacific and around the world, collapsed in bankruptcy in 1991 after having struggled for more than a decade to compete in a deregulated airline industry.
Martin Shugrue, once the old airline's chairman and more recently trustee of the bankrupt Eastern Airlines, said the new Pan Am would initially fly between New York and Los Angeles, Miami, San Francisco and Chicago. Other major cities will be added as the airline expands, Shugrue said.
Pan Am will fly leased wide-body Airbus A300 jets and offer good food in both coach and first class, at fares below others on those routes, Shugrue said at a news conference in a private club atop the old Pan Am Building in New York. (Shortly after the airline shut down, the landmark tower was renamed the MetLife Building.)
``This will be a full-service, real airline, with fine food in first class, served on real china and with real silverware. ... And in coach, food you can actually eat,'' he said.
Pan Am said it was also striking marketing deals with European and Latin American airlines to make it easier to give their international passengers connecting flights to other U.S. cities from Kennedy or Miami.
Shugrue declined to name carriers in the alliance, but said they would not be big foreign airlines that already have U.S. marketing partners, as British Airways has with USAir and KLM has with Northwest.
The new Pan Am will have the lowest costs in the industry, about 5 cents per seat per mile, Shugrue said. Other airlines' costs range from 7 to 12 cents per seat per mile. Pan Am achieved such economy, he said, in part by getting favorable rates on its leased jets and by contracting for services such as meal catering and baggage handling. The only employees of the airline will be those with direct customer contact, he said.
Also helping restrain costs, airline industry analysts say, is that thousands of former Pan Am and Eastern employees are qualified and eager to go back to work in the airline business, at much lower wages than before.
The new Pan Am will be well-capitalized, with about $30 million from private investors, including Shugrue and his partner in the venture, Charles E. Cobb. Cobb bought the Pan Am name, logo and other assets in 1993 for $1.3 million. He is a former ambassador to Iceland and was undersecretary of commerce for travel and tourism in the Reagan administration.
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