Pan American World Airways has eased out its co-founder and chief executive, Martin Shugrue, to be replaced by airline veteran David Banmiller, who is charged with turning around the start-up's heavy losses and seeing through the merger of operations with Carnival Air Lines.
Pan Am confirms that Shugrue has stepped down to serve in a newly created non-executive position as board vice-chairman. He will hand over responsibilities to Banmiller, who has held a series of posts in the US airline industry, including stints at Trans World Airlines and American Airlines.
The management shift comes as Pan Am posted further heavy losses for the third quarter to the end of September. The airline suffered a net loss of $21 million on revenues of $37 million, bringing the total losses for the first nine months of the year to $53 million.
The airline, which began operations in September 1996, is still confident that it can hit the target of an operating profit in the final quarter of this year. The latest results include a charge of $4.8 million relating to the removal of most of Pan Am's fleet of six Airbus A300s in favour of smaller Boeing 737s. Pan Am, which has signed a letter of intent to lease three 737-300s from Air Alaska, says that the last A300 is due to leave its fleet in 1998.
Including Carnival Air Lines, the acquisition of which was approved at the end of September, the airline has a combined fleet of 21 aircraft and an expanded route network covering 17 destinations.
The acquisition gave Carnival's billionaire owner Micky Arinson a 42% stake in Pan Am, and industry sources say that it was pressure from him to find a new leader that led to Shugrue's replacement.
Source: Flight International
