Pan Am To Fly Again Failed Airline Revived As A Low-Cost Carrier

Investors hoping to capitalize on nostalgia for Pan Am’s glory days unveiled a strategy Tuesday to get the airline flying again by allying with small foreign carriers and keeping costs low.

The old Pan Am folded in 1991. The new entity will resurrect the blue globe logo and bring aboard some of Pan Am’s old employees, including Martin Shugrue, the carrier’s former chief operating officer and now its president and chief executive.

Aiming to have the lowest operating costs in the industry, the new Pan Am hopes to profit by connecting international passengers to and from foreign airlines landing in New York and Miami.

“This is not a shoestring operation,” Shugrue said. “This will be a full-service, real-amenity, real airline.”

The new Pan Am hopes to be in the air within six months, flying newly leased planes bearing its logo. Pan Am’s assets were sold off following its closure and all that remains is the name.

Six European and Latin American airlines are among the foreign partners that have already sold $25 million worth of seats on yet-unscheduled Pan Am flights, Shugrue said. But speaking at a news conference, he said it was too early to reveal their identities.

The Pan Am president said there are numerous small, foreign airlines that want to be able to send their passengers on to U.S. cities such as Miami or Los Angeles, much in the same way Northwest transports KLM passengers.

“We need to garner only a small percentage of these passengers to become profitable within the first year,” Shugrue said. “At a nickel-a-mile or less cost we can last a long time at fares our competitors would find uneconomical.”

Pan Am is aiming for an operating cost of 4.8 cents per passenger, per mile.

Airline analysts say eight to nine cents per mile is the industry standard, and new start-ups hope to achieve 7.5 cents per mile.

The new Pan Am will operate out of New York and Miami. It will offer daily Miami-New York, New York-San Francisco and New York-Los Angeles flights starting sometime in the summer.