A new, smaller Pan Am returns to service

From Correspondent Susan Candiotti

MIAMI (CNN) -- Pan Am was airborne Thursday for the first time since it filed for bankruptcy and shut down five years ago. The once-familiar blue-and-white globe logo is the same, but much else is not.

Pan Am is substantially smaller than it was during its heyday. The new airline will start with two daily flights and about 250 employees. In the late 1960s, Pan Am had hundreds of daily flights and about 44,000 workers.

The revamped airline also is offering discount flights. Pan Am boasts $99, unrestricted one-way fares from New York to Miami, and $198 flights from New York to Los Angeles. Despite the cutbacks, Pan Am aims to be a full-service airline.

Passengers are served meals on every flight, and can see a movie, although Martin Shugrue, chief executive officer, couldn't tell you what the movie was on his inaugural trip Thursday. (5 sec. /51K AIFF or WAV sound)

As one of Pan Am's three A-300 Airbuses rolled down the runway at John F. Kennedy International Airport in New York, the champagne was flowing as Shugrue toasted both invited guests and paying customers, many of whom were airline buffs.

"I wanted to be a part of aviation history," said one passenger, referring to Pan Am's glory days in the 1940s, when the Pan Am logo was recognized worldwide.

A recession, deregulation, and massive financial losses forced the airline to shut down in 1991. Some say the original airline never recovered from the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, that killed 270 people. But analysts predict the new airline with the old name stands a better chance of survival.

"This time, they're in the condition of an economic recovery -- recovery in the airline industry and experienced management," economics professor Kenneth Lipner said.

First stop for the first flight was Miami, where the air traffic control tower told the jet, "Clipper 21, turn right. It's good to have you back." (5 sec. /58K AIFF or WAV sound)

"The legend continues," the pilot responded.

For all the celebrating, both Pan Am and ValuJet -- another low-cost airline just given the green light to fly again -- are being scrutinized by regulators to make sure cheap seats don't mean safety has been sacrificed.

"Because of the ValuJet problem, my guess is that any new start-up airlines would have to recognize that they would have to have the highest standards in safety and maintenance in order to compete," Lipner said.

Since last weekend, Pan Am has logged an average of 3,000 reservations a day. Will its low cost, one-way fares last beyond November? The airline says that depends on business.

Related stories:

• Shugrue guides resurrection of Pan Am - September 25, 1996
• CNNfn - Pan Am rises from ashes to fly again - January 30, 1996
• Revamped Pan Am resumes flying next week - September 19, 1996

Related sites:

• Pan Am
• Department of Transportation
• FAA

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