Pan Am-United Talks Over Latin Routes Stall; Creditors Reject United Offer
NEW YORK (AP) _ Pan American World Airways Wednesday said it failed to agree with United Airlines over the sale of its Latin American and Caribbean routes.
Pan Am spokesman Alan Loflin said the carrier wanted United to hire more Pan Am employees and that the price was not high enough. Loflin would not say how many employees United wanted or specify the amount of the offer.
The Miami Herald reported Wednesday that United’s offer was for nearly $200 million.
The announcement came shortly after Pan Am’s creditors rejected United’s bid for the routes. The creditors said the offer was inadequate, but that they were willing to talk to United about how it could be improved.
Loflin said the issue of resuming talks with United was under review. He said the creditors’ announcement was not a factor in Pan Am’s decision.
United officials had no immediate response to the creditors’ announcement and could not be immediately reached following Pan Am’s statement.
Neither airline has commented on the specifics of the offer made by United for the last remaining international routes of Pan Am, which filed for Chapter 11 protection in January. Leon Marcus, an attorney representing Pan Am creditors, also declined to elaborate on the offer or what problems the creditors had.
Marcus said there were other participants in the talks that have been going on for more than a week, but he would not identify them.
Hyatt Hotel chief Jay A. Pritzker, of Chicago, has been identified by Pan Am as an interested party. But Pritzker has not commented on any interest in Pan Am, and the airline will not say what he has been looking at.
As creditors met Wednesday, they also decided to defer voting on Delta Air Lines agreement with Pan Am to buy all its routes across the Atlantic and beyond for $260 million, Marcus said. The creditors want more details, he said.
The airlines have said it would take some time to document each aspect of the deal, and Marcus said the creditors were not taking a stand either way.
Two airline executives familiar with the deal have said creditors had been involved as the package was put together, and the creditors agreed at the time it was a good deal.
Assuming the Delta deal is approved, the Latin American and Caribbean operations are about all Pan Am would have left of an aviation empire that once spanned the globe. Remaining assets would be liquidated later.
The Miami Herald’s report on Wednesday said the United offer to Pan Am might cost more than 4,000 Pan Am workers in the Miami area their jobs.
Pan Am had hoped United would follow the lead of Delta Air Lines, which agreed to hire 6,000 Pan Am workers as part its deal to purchase the routes in Europe, Asia and Africa.
Pan Am has been negotiating asset sales that are expected to lead to its death, and an airline executive familiar with the carrier’s strategy said Pan Am is seeking to preserve jobs for as many of its 22,000 employees as possible.
After Pan Am reached its deal with Delta, its routes in Latin America and the Caribbean were the last valuable assets to be sold. United had recently made an offer on those and other assets, but neither airline has provided specifics.