Pan Am Corp. gave up the idea Friday of resuming scheduled service and won permission to shrink to a charter carrier after the airline was unable to find an investor to rescue it from bankruptcy.
U.S. Bankruptcy Judge A. Jay Cristol said it was too early to consider a motion by a federal trustee who acts as a watchdog in bankruptcy cases to halt operations and liquidate Pan Am’s assets.
“It is premature to jump into liquidation at this point. I think there is a possibility that some viable operation can come out of this,” Cristol said. “Expenses have been cut not with a scalpel, but with a meat ax.”
Pan Am conceded defeat at a bankruptcy hearing Thursday and was allowed to pull the plug on the $60,000-a-day leases covering seven aircraft. The grounded airline had hoped that it could resume scheduled service within a day or two of an approved bailout plan.
But three potential investors fell through since flights were canceled Feb. 27.
Without the leased jets, Pan Am is left to lease out daily the three charter aircraft it owns.