A Pioneer Clips Its Wings

By John Greenwald.

A worldwide radio audience listened and 100,000 onlookers cheered on Nov. 22, 1935, as the giant* seaplane China Clipper lumbered out of the waters of San Francisco Bay and headed west. The seven-day, four-stop voyage to Manila by the Pan American World Airways craft marked the first commercial flight across the Pacific and opened a romantic new chapter in aviation history. Romance went to the movies in the 1936 film China Clipper, starring Humphrey Bogart.

Last week Pan Am closed the books on its pioneering role. In a startling move, the ailing carrier sold its Pacific routes to United Airlines for $750 million. The profitable Far East service accounted for more than 20% of Pan Am's 1984 operating revenues of $3.3 billion.

The deal will bring needed cash to an airline that has lost more than $1 billion since 1980 and suffered a 28-day strike by ground workers in March. Pan Am will use the money to reduce its $1.2 billion debt and help pay for 28 jets it is getting from Airbus Industrie at a cost of more than $1 billion. Pan Am Chairman Edward Acker called the route sale "a great trauma for me personally. It was like letting your child leave home to get married or go off to school."

The move is the latest in a series of Pan Am retrenchments. The company sold its Manhattan headquarters for $400 million in 1980 and its Intercontinental Hotels chain for $500 million the following year. In March, Pan Am sold its food- preparation unit.

The planned route sale has made

some Pan Am workers bitter. While the agreement calls for United to hire about 2,700 Pan Am employees, officials of the Flight Attendants Union fear that Pan Am members could lose up to 2,000 jobs. Partly as a result, the outcome of a vote on a new contract for Pan Am's 6,000 flight attendants is now uncertain.

United (1984 revenues: $6.2 billion), the largest U.S. air carrier, has long sought to add the booming Far East to its flight plan. "We're ecstatic," said United Chairman Richard Ferris. "For years we've been an applicant in all Pacific route cases, with only one recent success." That was a new service linking Seattle to Seoul, Tokyo and Hong Kong, which United began in 1983 after a five-year wait for foreign agreement. The takeover of the Pan Am routes, while subject to review abroad, should encounter no such delays.

United, which netted $258.9 million last year, has recently flown into its own patches of turbulence. The airline last week reported a $3.2 million < first-quarter loss, largely because of airfare wars. In addition, its 4,900 pilots, angered by the company's plan to adopt a two-tier wage scale that would lower the pay of new flight officers, voted to strike just after midnight on May 17.

United will need approval from the Transportation Department and President Reagan before it can fly Pan Am's routes. That regulatory process could take up to eight months. And while their opinion will not count in the final decision, saddened aviation buffs will undoubtedly decry the loss of the Clipper routes that Pan Am possessed.

FOOTNOTE: *The Martin-130 flying boat weighed 25 1/2 tons, cruised at 156 m.p.h. and could hold up to 41 passengers. A modern Boeing 747 jumbo jet weighs 389 tons, has a 565-m.p.h. cruising speed and seats 460.

With reporting by Lee Griggs/Chicago and Thomas McCarroll/New York