Pan American World Airways has been given a stay of execution by the bankruptcy courts and will continue to operate charter flights as the search goes on for a financial rescuer.
The low cost airline terminated the lease of five Boeing 737-400s from International Lease Finance (ILFC) on 23 March. Two further 737-400s, the last remaining leased aircraft, will be returned to ILFC by 1 April, leaving Pan Am with two owned 727-200s and one 737-200 to fly charters. The airline stopped scheduled flights when it filed for Chapter 11 bankruptcy protection on 26 February.
The latest move follows a ruling from the bankruptcy court on 20 March that a move to force liquidation of Pan Am was premature and that the airline be allowed to conduct charters as it seeks financial backers. All sides agreed that the ILFC leases should be terminated. Pan Am was unable to generate enough income to cover each aircraft's $60,000 a day rental fee.
"The company's scaled down operations are projected to be both cash positive and profitable. Pan Am also continues in discussions with investor groups," says the airline. The group has been struggling to find investors, however, and entrepreneur Carl Ichan was recently ruled out as a potential rescuer of the airline.
Source: Flight International
