Report: Northwest Airlines Near Deal to Operate Pan Am Shuttle With AM-TWA-Pan Am, Bjt
MINNEAPOLIS (AP) _ Northwest Airlines has arranged for a Portland, Ore., utility to buy the Pan Am Shuttle and allow Northwest to operate the shuttle with an option to buy, according to a published report Monday.
Northwest would not comment on the report in The Wall Street Journal. The newspaper said PacifiCorp would buy the Boston-New York-Washington shuttle for about $150 million.
″We can’t comment on that as to whether we are in negotiations or struck a deal,″ said Doug Miller, a spokesman for Northwest, the nation’s fourth largest airline. ″There’s no announcement to make and we don’t have any comment on it.″
PacifiCorp and New York-based Pan Am also declined to comment.
PacifiCorp is the third largest utility in the West, holding Pacific Power of Portland and Utah Power of Salt Lake City. A subsidiary, PacifiCorp Financial Services Inc., has $1.7 billion in assets and has interests in 50 aircraft. It reported a 1989 aviation finance portfolio of $244 million, spokeswoman Caroline Petrich said.
PacifiCorp Finance Inc., a subsidiary of PacifiCorp Financial Services Inc., took preliminary steps nearly two years ago to acquire HAL Inc., the parent of Hawaiian Airlines. The deal never was completed.
Marc Robins, an analyst who follows PacifiCorp for Capital Consultants Inc. of Portland, said he was unaware of the PacifiCorp-Northwest-Pan Am deal. But he said it sounded like a good opportunity for PacifiCorp Financial Services.
The Portland company’s interest likely would remain purely financial, he said. PacifiCorp executives probably are not interested in running an airline, Robins said.
The Journal, quoting unidentified sources familiar with the arrangement, said union leaders were told this month that a sale was imminent but later were told it had been delayed.
Leaders at three Pan Am unions could not be reached for comment. No one answered phones in their offices.
Guy Cook, head of the largest union at Northwest, said he knew nothing about the reported deal. But he said such an acquisition could make sense for Northwest.
″I’ve heard a lot of rumors about an East Coast shuttle,″ said Cook, president of the International Association of Machinists District Lodge 143. ″I knew there was an interest and from a shuttle standpoint for Northwest there would be no problem.″
Cook said Northwest might be able to run the shuttle without adding a lot of workers because it already has bases in New York, Boston and Washington. He speculated that Pan Am could use the cash from a shuttle sale to stay afloat and clear the way for a proposed buyout by Trans World Airlines Inc.
Henry ″Pete″ Dodge, chairman of the Northwest Airlines chapter of the Air Line Pilots Association, said he probably would have been informed by Northwest Chairman Al Checchi if such a deal for the shuttle were imminent.
Dodge said he had no knowledge that a transaction was in the works, but said he would welcome such a move.
″It doesn’t totally surprise me,″ Dodge said. ″Anything to help strengthen our domestic market certainly can’t hurt.″
Checchi, who led a $3.65 billion buyout of Northwest last year, repeatedly has said he wants to expand his airline through acquisitions. He had expressed interest in the former Eastern Airlines’ Boston-New York-Washington shuttle before it was sold last year to Donald Trump for $365 million.
Northwest has hubs in Detroit, Minneapolis-St. Paul and Memphis.