Pan American World Airways has found a new investor prepared to rescue it from bankruptcy protection. US rail freight group Guilford Transportation Industries has outlined plans to buy the failed low-cost carrier for nearly $24 million.
Pan Am, which filed for bankruptcy court protection on 26 February, says its agreement with Guilford will be presented for bankruptcy court approval on 6 May. The deal would form the foundation of the carrier's reorganisation plan, which will be filed by 20 May and set for confirmation later in the year.
Pan Am has dropped scheduled airline services, but the carrier continues operating charter flights using two Boeing 727-200s and one Boeing 737-200.
Guilford, which was formed in 1981 and now operates the largest regional rail system in the northeastern USA, says that it plans to acquire all the carrier's aircraft, route authorisations and the Pan Am name for "in excess of $23.5 million in cash". It will also inject $5 million of immediate working capital under the reorganisation plan.
A deal between Pan Am and financier Carl Icahn, who previously ran Trans World Airlines, fell through, as did a second potential transaction.
"Guilford's proposed investment in Pan Am will allow an American icon to remain aloft," says David Banmiller, Pan Am's president and chief executive, who had already announced that he was planning to leave the company on 30 April.
Source: Flight International
