Braniff Inc. Chairman Jay A. Pritzker has held discussions with Pan Am Corp. officials about acquiring the company and possibly merging the two airlines, according to industry sources.
The talks are the latest in a string of negotiations with potential buyers for the financially troubled airline company, none of which has resulted in concrete results so far.
Last week, Pan Am's board rejected an offer from MGM Grand Inc. to acquire control of Pan American World Airways Inc., saying that the proposal was so conditional that it amounted to nothing more than "an option to buy our airline business."
Pan Am's difficulties include its failure to win concessions from its unions. Four of the company's five unions offered the carrier major wage concessions in return for at least 20 percent of Pan Am's stock, but the airline declined the offer. The unions have made similar offers to prospective bidders for Pan Am, including financier Sir James Goldsmith, hoping to attract a buyer and to dump Pan Am's management. American Airlines also looked at, but did not act on, the possibility of acquiring Pan Am.
The company, which said earlier in the year that it expected to turn around last year's losses, reported a third quarter profit of $63.4 million, up from last year's $5.5 million. But airline industry analysts expect that the company will end up with another losing year, in part because of higher fuel costs.
In addition, the company carries a heavy load of debt, including $900 million in long-term loans and $500 million in unfunded pension liabilities.
With the expansion of service to Europe by other carriers operating nonstop flights from new "gateway" cities, Pan Am has also lost some of its prominence in international service.
Pan Am spokeswoman Pamela Hanlon said yesterday that the company would have no comment on reports of negotiations with Pritzker. Pritzker and his family own Hyatt Hotels Corp., which has a controlling interest in Braniff.
Braniff Vice President Harold Handelsman also had no comment. The Associated Press reported that Braniff's chief executive, Patrick Foley, said the two companies were in the preliminary stages of a discussion.
In addition to other potential bidders, TFC Towers Financial Corp., an insurance and financial services company, has said that it is interested in taking over the carrier but has not made a bid for it so far.