Pan Am Goes Airbus Pt2: Globes to Widgets

By January 1991 Pan Am was in dire straits and desperately searching around for assets to sell and potential buyers to come forward. A deal with United for it to buy the airline's London Heathrow operations for $400 million was mired in political trouble. Even with the money Pan Am had proven capable of burning through huge amounts of cash. Finally the end was in sight.

In December 1990 Airbus had pulled the leases on the 21 A310s Pan Am operated, with the airline almost a year in arrears and not able to give guarantees that they could even pay the outstanding debt. Somehow the Airbuses were returned but on January 9, Pan Am declared Chapter 11 bankruptcy.

Operations continued much as before and a deal was cobbled together by United and the Bush Administration to keep Pan Am flying, at least long enough for the Heathrow route swap to go through. Tom Plaskett, Pan Am's chairman, was casting around for a buyer but not many were interested. Carl Icahn of the almost as enfeebled TWA showed interest but nobody wanted a piece of that. The fallout from the 1991 Gulf War caused a huge passenger decrease on Pan Am's routes, but in March the United deal at last went through giving Pan Am some breathing space.

Into the void stepped Delta Air Lines. Ever the conservative southern airline Delta had avoided the bloodbath of the 1980s and instead focused on building a well run successful airline. Now it needed to be able to breakout of its primarily domestic situation and compete against American and United. In April 1991 Delta undertook a $476 million stock offering to raise money for expansion. It was eyeing up Pan Am's European network, which it saw as a quick way to get in on a good thing complete with aircraft and pilots.

But Delta wasn't interested in the 747s or the senior pilots that flew them. It wanted the smaller Airbus 310s, newer and more efficient and better suited to the lower capacity European sectors. Delta wanted the deal done fast and so did Pan Am. The airline was losing $2-3 million a day and was almost out of cash again. After much haggling on August 12, 1991 a deal was brokered by which Pan Am sold almost everything it had left for $416 million in cash and Delta taking on $389 million of debt. Delta also agreed to invest in the remnants of Pan Am, which would survive as a small Miami based airline flying to Latin America. As part of the deal Delta would take on all the A310s.

The swap of the North Atlantic operation would go ahead on November 1 and Pan Am would come out of bankruptcy one year later. It never happenned. Delta tookover the European routes and Frankfurt hub as scheduled but Pan Am II was a money eating monster and after spending over $100 million propping it up Delta ran out of patience. On December 4, 1991 Pan Am ceased operations for good.

Delta however had gained a new type - and its first Airbus product. The A310s gradually gained Delta titles and then the widget itself. Delta showed real interest in operating the A310s. On March 5, 1992 it even ordered 9 extra new A310s directly from Airbus. Unfortunately Delta itself was beginning to suffer financially (as related in my blogpost Delta's Depression: The Ron Allen Years). Before any of the new A310s were even delivered Delta announced on April 15, 1993 that it would park the 21 former Pan Am A310s. The new A310s began to arrive in September 1993 but in June 1994 it was announced that all remaining A310s would be removed from service and some European services cutback. The A310s were replaced with 767-300s allowing Delta to standardise its fleet and save money.

The new A310s went mainly to Aeroflot and Air Jamaica with N840AB joining the latter in October and not being reregistered until August 2001 (as 6Y-JAD ‘Spirit of Mandeville’). In January 2004 she became AP-BGP ‘Muree’ with PIA.

The older A310s had more varied careers. N823PA, originally F-WWCG, lasted in the Delta fleet until 1995. She and sister N824PA joined Air India, as V2-LEC, but after only two years she was released to Merpati Nusantara as PK-MAW. In June 1999 she was reregistered D-ASAD and converted to freight configuration subsequently joining FedEx in March 2001 as N801FD.

The A310s time in Delta's fleet was short-lived, however this was through no fault of the aircraft itself. The purchase of Pan Am's assets at the time seemed like a folly however it has proven to be one of Delta's best decisions in the longer term. Today Delta remains one of the largest airlines across the Atlantic whilst Pan Am sadly is now history. Given the poor showing of the later Pan Am incarnations I can only hope that it remains that way.

References

1994, June. Delta to cut A310s. Seattle Times
2012. Gandt, Robert. Skygods: The Fall of Pan Am
Delta Flight Museum. Aircraft by Type: A310