Air Transport World

Shuttling fortunes: suitors are eying both Trump and Pan Am. (Trump Shuttle Inc., Pan Am Shuttle Inc.)

New York- NWA, parent of Northwest Airlines, seems to have locked up a deal to take over operation of the Trump Shuttle. And though less likely, the Pan Am Shuttle, too, may have changed hands, possibly going to Delta. NWA and a consortium of banks led by Citicorp threw struggling Donald Trump a lifeline to help pull him out of his financial quagmire, with NWA assuming the $245 million first mortgage on the airline.

The banks apparently will trade his outstanding loan of $145 million backed by only his personal guarantee for a share of equity in the shuttle. Northwest would operate the airline for five years, with an option to buy it at the end of the period.

Selling the Pan Am Shuttle would be more complicated. Whereas, Trump is an independent, free-standing airline organized along traditional lines, with its own aircraft and crews, Pan Am's shuttle basically is an operating company, wet-leasing its aircraft from parent Pan American World Airways, which also supplies maintenance and other services.

New-airline procedures

A new owner would have to hire crews-perhaps transferees from Pan Am-and go through the standard procedures for a new airline, including certification of fitness, qualification of crews, route test flights and approval of rewritten maintenance and operations manuals, as was required of Trump Shuttle when it was bought from Eastern.

Among reported interested lookers at the Pan Am Shuttle have been NWA, Oregon utility PacifiCorp, a group led by former Trump Shuttle President Bruce Nobles and, most recently, Delta.

Regardless of who winds up in control of the rival shuttles-the existing owners or new ones-the near future looks difficult. The problem is a traffic fall-off that may be more than temporary. The walk-in, hourly, guaranteed-seat Washington-New York-Boston service that used to be a money-making machine for now-deceased Eastern Air Lines needs about 4 million passengers a year for the two present operators to make profits. …

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