NEW YORK -- A fierce bidding war broke out yesterday between American Airlines and United Airlines for the Latin American routes and other assets for sale at the liquidation of Pan American World Airways.
The two airlines, which are longtime rivals, suddenly made dramatic moves late in the evening.
United, which had an initial bid of $66.5 million, pushing its bid up to $100 million; American topping that bid with an offer of $105 million; and United came back with an offer of $110 million plus a promise of employment for 1,000 former Panam employees.
American then upped its bid to $115 million, plus a promise to consider offering jobs to former Panam employees for positions that open up in the next 12 months.
The bidding, which at first seemed tepid, with no major rivalry, heated up at about 8 p.m. in the courtroom of Judge Cornelius Blackshear of the U.S. Bankruptcy Court, and after a recess, lawyers for both carriers scrambled to confer with their chief executives to see how much more money they were prepared to put up for the valuable assets.
A lawyer for American Airlines was in the hallway speaking to Robert L. Crandall, the airline's chairman and chief executive, which already has gained control of major Latin routes by buying them from Eastern Airlines when it was in Chapter 11.
Meanwhile, a lawyer for United was on the telephone with Stephen M. Wolf, that airline's chairman, who is seeking to make United a major carrier to Latin America in one move, since it has no flights there now of any significance.
For most of the day, United had no competition in its bid for most of Pan Am's assets and routes. Late in the day, however, Delta and American Airlines topped what was then a United bid of $84 million with a joint bid of $90 million.
Their move was seen mostly as a tactic to force United up, since American Airlines, with its Latin routes, might have great difficulty in persuading the Department of Transportation to approve an acquisition of Pan Am's routes.
Earlier, USAir had also been involved in the bidding, but it dropped out.
USAir bid $16 million for slots at Washington National Airport and New York's La Guardia field.
If United were to win, it would gain control of most of Pan Am's Latin American routes, as well as valuable landing and takeoff slots at three important domestic airports; Washington National, La Guardia and O'Hare International Airport in Chicago.