Delta's big buy-out: the carrier's acquisition mean new connections for Utah.

• Author: Hunt, Randall A.
• Position: Delta Air Lines Inc.'s acquisition of Pan American World Airways Inc.

Delta's Big Buy-Out

Recently, Delta Air Lines made a big splash in the travel industry with its offer, and subsequent approval by the bankruptcy court, to acquire a huge portion of Pan American World Airways.

One carrier's acquisition of another is not surprising these days. Since deregulation occurred in the early '80s, dozens of airlines have come and gone and several others have merged. Some, like Eastern, have folded.

Over the past 10 years, carriers have entrenched themselves into a domestic route system which forced some out of business and others to join forces for survival. American acquired Air Cal for strength in the California corridor. Delta acquired Western to beef up its western regional presence. United acquired Pan Am Pacific routes to enhance its domestic feed through Portland. TWA bought Ozark; Continental acquired Frontier; US Air bought Piedmont; and Northwest acquired Republic; all of which added muscle to the airlines' domestic route systems. Also, each carrier gained valuable gate space which might have been impossible to acquire without merging with another carrier.

Some carriers continue to struggle in today's aggressive deregulated environment. Continental, America West, and TWA continue to search for partners who can help them survive.

Delta's New Strength

Pan American World Airways, now a mere shadow of what was once the world's largest airline, came extremely close to ceasing operations. While other carriers such as United, American and Delta were beefing up their domestic route structure through "hub and spoke" systems, Pan Am rebid primarily on its international route system for most of its revenues. The carrier was forced to begin selling assets in the '80s, including its Manhattan headquarters, international hotels, and its Pacific routes in 1985.

In the meantime, several strong domestic carriers were chipping away at Pan Am's international market share by feeding their own international routes with "single carrier" domestic traffic.

According to Aviation and Space Technology, in addition to Pan Am's lucrative East Coast Shuttle, Delta will gain the following:

1. Pan Am Route 132 from U.S. points through a variety of routings to dozens of destinations throughout the Middle East and Europe, including a major hub in Frankfurt and destinations such as St. Petersburg and Moscow, USSR.

2. Pan Am Route 133, Segment 1, from U.S. to Johannesburg, South Africa, via Boston, the Azores, Lisbon, and nearly a dozen other...