United may stabilize Latin routes

December 11, 1991|By Fort Lauderdale Sun-Sentinel

MIAMI -- If United Airlines completes the purchase of Pan American World Airways' Latin American routes, it would bring stability to those routes for the first time in years, analysts said yesterday.

United agreed late Monday to pay $160 million for the routes. It beat out American Airlines, which flies to many Latin American and Caribbean countries on routes it bought from Eastern Airlines in 1989.

Robert Decker, an analyst with Duff & Phelps, said United can collect passengers from around the country to funnel them through Miami in a way Pan Am could not.

"United's got a very, very strong domestic route structure, and its ability to feed those routes is probably equivalent to American," he said.

But Mr. Decker speculated that it might be quite a while before United gets a green light from the U.S. Department of Transportation to assume the routes. Foreign routes are governed by bilateral treaties, and their transfer must be approved by regulators.

Complicating the decision is the vacancy created with the naming of Transportation Secretary Samuel K. Skinner to become President Bush's chief of staff.

With DOT approval, United could provide real competition to American and consistency for consumers.

"You haven't had financially stable U.S. carriers on those routes," said Ed Nelson, marketing manager at Fort Lauderdale-Hollywood International Airport.

Since the 1970s, the Latin American routes have been held by a series of carriers, including Braniff, Eastern Airlines and Pan Am, which have been forced to sell them because of financial problems.

Rick Elder, director of the Miami Dade Aviation Department, said he was relieved that United won because it is a major airline that will use the routes as a system.

Now, he said, airport officials at least have a chance to sell United on expanding into Pan Am's maintenance base and other offices at Miami International.

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