A funny thing happened after Pan Am Corp. filed for bankruptcy protection last week: nothing. Passengers and travel agents couldn’t care less. Bookings didn’t drop, the phones didn’t ring off the hook, travel agents didn’t cancel or advise against flying the carrier. What a change from the old days, when filing for bankruptcy protection meant something, like searing the heck out of people. Who would fly troubled airline, the thinking went, when maintenance might be jeopardized? When Braniff International filed for chapter 11 in 1982, “People went bananas,” recalls Florida travel agent Carol Moss. “Now, people are apathetic. They’re so used to it.”
Sad but true. Following Eastern and Continental, Pan Am is the third major U.S. carrier to tumble into chapter 11 in less than two years. Pan Am’s financial troubles, aggravated by the recession and Persian Gulf fears, gave it little choice but to seek court protection from creditors. But it is also counting on business staying firm despite the filing. When Continental entered chapter 11 in December, bookings dropped about 20 percent the first day; but now, says spokesman Art Kent, “we’ve been flying at or above the levels we had last year at this time.”
Pan Am’s strategy to assure the public is becoming commonplace in the industry. It took out full-page ads in major newspapers ’explaining its filing. Travel agencies were singled out for stroking. Pan Am chairman Thomas Plaskett met all week with travel agents and later headed to Frankfurt to calm European agents (who tend to be less sanguine about bankruptcy). Thomas Cook Travel agency was dispatched a two-page fax from Pan Am outlining its decision. It worked. Says Cook vice president Henry Blinder, “We’re confident they’ve taken the necessary steps to ensure our travelers will be protected. "
Of course, there’s nothing like low fares to keep even ailing carriers’ planes full. Agent Moss said she had a client who wanted to fly only Delta-until she found a cheaper fare on Eastern. Says Moss, “People will travel on the carrier that will take them where they want to go at the lowest possible price.”
Bankruptcy filings don’t hurt as much these days for another reason: passengers don’t have much choice about which carrier to fly. Deregulation has meant fewer airlines and flights to specific destinations. For example, the huge number of Continental flights out of Newark’s airport often limits passengers to that carrier.
On the whole, the three airlines would still rather be in Philadelphia than chapter 11. They all remain in dire financial shape, particularly Eastern, whose image was already tarnished by labor strife. Continental might emerge from bankruptcy proceedings, thanks partly to its strong domestic routes. If Pan Am survives, it might be a shell of itself. At the end of the week, the bankruptcy judge gave the airline a reprieve by approving a $150 million loan and the sale of its London routes to United Airlines. But other carriers, including Delta, Northwest and TWA, are circling to buy some or all of Pan Am’s assets. (The recent takeover bid by TWA’s Carl lcahn seems to have been shelved.) “It really has been business as usual,” said a Pan Am spokesman. Unfortunately for the airline, business as usual may not be good enough.
Photo: Counting on business to stay firm despite the filing: Pan Am chairman Thomas Plaskett
