The shock waves from a terrorist attack often spread widely, to include not only the immediate victims of a bombing or shooting but to their families, the area of the attack and the businesses affected by it. In the case of the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, Libya eventually admitted responsibility and created a $1.5 billion fund to pay the 270 families of those on the plane and on the ground who were killed.
But did that bombing also kill the airline? The once preeminent carrier closed down three years after the attack. In a federal courtroom in Washington on Wednesday, dozens of former Pan Am pilots from around the country gathered to press their case that they were victims of Lockerbie too, suddenly thrown out on the street in 1991 with their jobs, their pensions and their health insurance all gone. Most are now in their 80s, and they argued to the Foreign Claims Settlement Commission that they too are entitled to a chunk of the Libyan settlement fund. The two members of the commission have already expressed a preliminary opinion that they are not entitled to a dime, and the pilots — backed by a former Pan Am executive — made an emotional final appeal that the terrorist act harmed them as well.
“The tentacles of this thing, they are long and they reach deeply,” said former pilot Bruce Abbott, who has been leading litigation for his colleagues since 1993. “They affected many people whose names are not found in the graveyard. …We’re here seeking justice, which I know is due. Overdue.”
The courtroom full of gray-haired former pilots and their spouses or children erupted into applause.
Nearly all of Pan Am’s pilots had military flying careers before joining the airline, and many of those who lost their jobs were in their 50s when Pan Am folded. “No one really wanted to hire them,” said their lawyer, Joanne Young. “Once the doors were padlocked, these guys were out in the cold.” Young pointed out that the compensation they’re seeking “isn’t taxpayer money. This is Libyan blood money.”
Rich Fitzgerald, 82, came in for the hearing from Rose Hills, Calif. He flew for Pan Am for 24 years. “I went from making $104,000 to making $33,000 a year, working part-time in the Miami airport. No benefits, no sick leave, no medical. It was a tremendous comedown.” He said only a pension he received from serving in the Navy and Naval Reserves kept him from losing his home. “I saw first hand the impact of Lockerbie,” he said.
Leonard Ambers, 80, of Manteca, Calif., said he was a Pan Am pilot for 25 years after serving in the Air Force. “See this jacket?” he said opening up his sport coat. “It was bought in 1985. You have to cut back on everything. You’ve got a nice career going for yourself, and find yourself searching around for jobs.”
Abbott, 49 fellow pilots and a Pan Am flight attendant first sued Libya in federal court in 1994 under the theory that the bombing had caused the implosion of the airline. But Libya was dismissed from the case on sovereign immunity grounds in 1995, though Abbott pointed out that terrorist acts should not have been considered protected governmental conduct. Pan Am also sued Libya, in part under the same theory as the pilots, and they eventually settled the case in 2005, but airline employees received only about five to six percent of what they were owed when Pan Am ceased operations.
As the United States in the 2000s began to improve diplomatic relations with then-leader Moammar Gaddafi, to include Libya agreeing to give up its weapons of mass destruction, Libya agreed to pay into funds for American victims of terrorism and the United States also paid $300 million for victims of a U.S. bombing raid in Tripoli. By 2008, Libya had deposited $1.5 million for victims of Lockerbie and the 1986 bombing of a Berlin disco frequented by American military personnel.
Abbott’s group began applying for money from the fund in 2008, but wasn’t approved to be considered by the Foreign Claims Settlement Commission until 2013. Individually, each pilot is seeking compensation for the years after 1991 in which they would have continued flying for Pan Am until their retirement, their “lost future wages” if the airline hadn’t collapsed.
But in July, the two-person claims commission issued a “Proposed Decision” for one pilot, followed by dozens of similar decisions in August, all denying the pilots’ claims in full. The pilots “failed to establish a sufficiently proximate causal connection,” commissioners Anuj C. Desai and Sylvia M. Becker wrote, “between the 1988 Lockerbie bombing and Pan Am’s closure three years later in December 1991. Pan Am’s finances and passenger traffic were improving before the recession and the Gulf War in 1990. It was those two events that sent the company into the relevant downward spiral, and the airline’s losses from that time period eclipsed those from immediately following Lockerbie.”
Wednesday, the pilots and their lawyers stood before Desai and Becker and tried to change their minds. On the pilots’ behalf, Thomas Plaskett, Pan Am’s former chief executive, told the commissioners that a planned acquisition of Northwest Airlines and then a merger with Delta Air Lines both fell through because of Lockerbie-related repercussions, and that both government and business flyers were told to stay away from Pan Am because of possible further terrorism. Ramesh Punwani, the airline’s former chief financial officer, said the third quarter of 1988 — just prior to the bombing — was “the most profitable in Pan Am’s history.” In the following three years, he said, “It was Lockerbie that was literally dictating our fortunes or lack of fortunes.”
But Desai challenged Punwani vigorously, noting that Pan Am’s passenger loads actually went up in 1990 and 1991. “If passengers increased by 26 percent,” Desai said, “I don’t see how you can say that [financial losses] is attributable to Lockerbie. … The main reason Lockerbie affects you is because revenues are lowered because fewer passengers fly your planes.” Punwani said revenues dropped as fares dropped and Pan Am also flew more planes, attempting to hold market share.
Desai also tore into projections by an aviation analyst that Pan Am’s revenues would have been significantly higher if not for Lockerbie. He and Becker noted that Pan Am had been losing money steadily for years prior to Lockerbie, including in the first half of 1988, and that the airline industry as a whole was suffering as a result of deregulation. Then fuel prices soared in 1990 after Iraq invaded Kuwait, and a recession hit, sending a number of airlines into bankruptcy; Eastern, Midway, Continental, America West and then Pan Am in 1991 all entered bankruptcy. When Delta backed out of a deal to buy Pan Am in December 1991, Pan Am immediately folded. “Events in 1991,” Desai and Becker wrote, “were clearly intervening, and, in a legal sense, suffice to sever any possible causal link with the Lockerbie bombing.”
A series of pilots took the witness stand to attest to Lockerbie’s impact. William Doss, a Vietnam vet who also worked as an investigator of the Lockerbie crash, said there was an unbroken chain of events from Lockerbie to “December 4,” the date in 1991 when Pan Am suddenly closed. Abbott told the commissioners, “Clearly it was an attack directed at the United States. The United States could absorb it. Pan Am had no ability to absorb it. You could see it. You could step in the back of an airplane, there’d be no one there.”
A spokesman for the Justice Department, which administers the foreign claims commission, said there was no set date for when a final decision might be reached in the case.