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Pan Am grounded

Employees remain uncertain and passengers are disgusted

Web posted Feb. 27 at 10:19 PM

MIAMI -- As Pan Am employees received layoff notices and more flights were canceled, the financially troubled airline got a $15 million bailout offer Friday that could eventually get it flying again next week.

The offer came from Rothschild Recovery Fund, a New York investment group specializing in bankruptcy rescues, Pan Am president David Banmiller said at a bankruptcy court hearing a day after the airline shut down.

Pan Am's two main airline units ran out of cash and filed for bankruptcy protection late Thursday and flights for Friday and Saturday were canceled. The company had $50 million in assets and $147 million in debts.

The airlines have reservations for 260,000 flights in the next nine months. Many major airlines, including American, Northwest and Trans World Airlines, said they would not accept Pan Am tickets.

Ticket agents at Miami International Airport wore a brave face as they gave luckless passengers their options earlier in the day. Pan Am listings carried a bright blue ``canceled'' designation on the flight-status screens.

``We feel disgusted,'' said Bensi Freundlict, who wound up buying an American Airlines ticket to New York to get home to London to run his Asian trading company.

Javier Yanes, a Miami area security guard, saved up for years so he could attend his grandmother's 80th birthday party in Puerto Rico. He was booked on a Pan Am flight March 6 and was concerned that he would miss the party.

``I couldn't believe it. I spent seven years trying to go to San Juan,'' Yanes said as he waited earlier in the day at the airport to learn if there was a change in the airline's status.

Pan Am World Airways -- which originally started in 1928 and was one of the most recognized airlines in the world -- went bankrupt and shut down in 1991 in the wake of the 1988 bombing over Lockerbie, Scotland, which killed 270 people.

The Pan Am name was sold at a bankruptcy auction and used to start a new airline two years ago. Apart from the logo and a few employees who came to the new company, there was little in common between the old international carrier and new low-priced domestic airline.

The new Pan Am began with 250 employees and three jets, offering one daily flight between New York and Miami, and New York and Los Angeles. It eventually carried 5,000 passengers daily to 14 cities, serving Florida, the Northeast, the Midwest and Puerto Rico.

Pan Am took over Carnival Airlines in September. The two airlines, which have 1,385 employees, lost more than $127 million in the first nine months of 1997. The airline's financial problems caused it to miss aircraft lease payments. It even had difficulty buying fuel this week.

Pan American World Airways Inc. and Pan American Airways Corp. sought Chapter 11 bankruptcy protection. The parent holding company, Pan Am Corp., did not. Most of the 14 jets in service at the time of the shutdown still carried the Carnival name.

During the bankruptcy hearing Friday, Judge A. Jay Cristol said he considers Pan Am as American ``as mom and apple pie,'' and he would do everything he could except pump his own money into the airline to get it flying again.

``The name Pan American is a glorious part of American history. Pan American taught the world to fly,'' Cristol said.

Cristol allowed the airline to spend $2.2 million on a two-week payroll due Friday, including $6,250 for Banmiller.