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American plans bid for Pan Am routes

AMR Corp., parent of American Airlines, tried to muscle into the market for Pan Am Corp.'s lucrative London operations Thursday, saying it could make a fatter offer than the $400-million that rival UAL Corp. has agreed to pay. The surprise announcement lobbed a potential obstacle to the deal announced Tuesday between Pan Am and UAL, parent of United Airlines. It also showed the enor-mous importance American attaches to obtaining routes to London, the gateway to Europe and a crucial destination for any aspiring global airline.

"We would welcome the opportunity to make an offer to acquire the United Kingdom route authorities and believe, if given the opportunity thus far denied us, we would propose terms substantially better than" UAL's, AMR chairman Robert Crandall said in a letter to Pan Am chairman Thomas G. Plaskett and other directors.

Crandall offered no details on a possible

bid. But he suggested a deal with UAL might have trouble obtaining clearance from U.S. and British authorities. He also hinted Pan Am could face legal difficulties if it did not seek higher bids.

"We believe that the fiduciary duties owed by you and your fellow directors to Pan Am's stockholders and creditors dictate that you afford us an opportunity to make a competing offer," Crandall said.

But Pan Am and UAL both seemed to rebuff his offer. Pan Am spokeswoman Pamela Hanlon said her airline "has a binding agreement with United Airlines," and would not comment further.

UAL spokeswoman Sara Dornecker also noted that Tuesday's announcement said UAL "has signed an agreement in principle." She too said the Chicago-based carrier would have no further comment.

In another possible hindrance to the UAL-Pan Am deal, the Teamsters Airline Division said it plans to sue Pan Am for selling the London operations cheap.

The Pan Am deal would be United's second victory over American in recent months. In the first, United beat out American for government approval of a highly valuable Chicago-Tokyo route, a victory that came shortly after the carrier reclaimed the No. 1 domestic market share from American.

Crandall's letter comes despite the chairman's warnings last week that skyrocketing fuel costs already had cut earnings severely and could cause the carrier to end the year with a loss.

But American spokesman Tim Smith said Thursday the immediate financial crunch will not stall American's $21-billion, five-year expansion program.

Pan Am's deal with UAL came after fruitless efforts by Pan Am to find a merger partner or buyer for Pan American World Airways, which has suffered big losses in recent years. Pan Am's U.S.-London routes were considered one of the few remaining prized holdings of the company that pioneered international air travel.

Under the agreement, UAL would acquire those routes, except for those leaving from Miami and Detroit. UAL would take over Pan Am's facilities at London's Heathrow Airport, while Pan Am would move its remaining flights to Gatwick Airport.

UAL's flights leave from New York, Washington, San Francisco, Los Angeles and Seattle.

American currently flies to London and Manchester, England, from Miami and its main hub at Dallas-Fort Worth International Airport. It also is awaiting government approval of its purchase of a Chicago-to-London route from Trans World Airlines.

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