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. Last Updated: 07/27/2016

Pan Am Takes On New Set of Wings

NEW YORK -- Pan American World Airways is being reborn, four years after financial troubles forced one of the world's air travel pioneers to shut its doors.

The new Pan Am plans to start U.S. domestic flights this summer and forge alliances with international carriers, said Martin Shugrue Jr., a former Pan Am executive who has been named president of the Miami-based carrier.

He said Pan Am plans to build on its name, which was synonymous with global air travel through much of this century.

"Pan Am will build on that wonderful legacy in our own unique, low-cost way," he told a news conference Tuesday

Industry analysts said that the Pan Am name remains a big asset and that its plan to offer low domestic fares in alliance with international carriers seems sound. Still, it will face stiff competition.

"The important thing is the Pan Am name. It still has quite a cachet overseas," said Brian Harris at S.G. Warburg & Co.

Pan Am plans to offer nonstop routes between major cities, including New York, San Francisco, Los Angeles, Chicago and Miami. Flights to other cities, including San Juan, Puerto Rico, may be added later.

Shugrue said Pan Am aims for low costs and low fares, offering round-trip, first-class tickets from New York to Los Angeles, for example, for $600 to $700, and economy-class fares of $500 or less.

The low-cost service will be a far cry from the days when Pan Am, under the aggressive leadership of founder Juan Trippe, inaugurated in-flight meals in 1929 and later employed white-jacketed stewards.

The airline has arranged $30 million in financing, including $20 million from private investors and $10 million from the Frost Hanna Mergers Group Inc. of Boca Raton, Florida. Pan Am agreed late Monday to merge with Frost Hanna to form the new company, called Pan American World Airways Inc.

Other investors include Chuck Cobb, a Florida businessman and former U.S. ambassador to Iceland who bought the Pan Am name and familiar blue globe logo in 1993. Cobb is providing $2.7 million in financing and will be chairman of the board.

Shugrue, a former Pan Am vice chairman, said the company was in talks with a half-dozen airlines in Europe and Latin America about forging links. He did not name the carriers.

The airline has agreed to lease three Airbus A300 widebody jetliners and plans to add at least five more by the end of its first year.

Pan Am's shutdown in December 1991 ended an era in air travel. The carrier was launched in 1927 with a flight from Key West, Florida, to Havana, Cuba, and in the 1930s inaugurated extensive international air travel.

Pan Am's service became the model for early luxury air travel. But its financial fortunes flagged in the 1970s and '80s and it received a crushing blow in December 1988, when Flight 103 was destroyed by a terrorist bomb over Lockerbie, Scotland.