Pan Am grounds A300s, furloughs 225 employees

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Cash-strapped Pan American World Airways will ground its two remaining Airbus Industrie A300s on 25 February and furlough 225 employees in the coming weeks.

The Miami-based airline had planned to park its A300s by 30 April, but pushed up the schedule in response to a looming financial crisis. On 18 February, Pan Am revealed it had fallen behind on $4 million in lease payments, and is in search of new financing sources.

"An airline of Pan Am's size cannot bear the expense burden of operating four different aircraft types," says company president David Banmiller. "Substantial cost and performance benefits can be achieved by utilizing the simplified fleet over Pan Am's core markets, and we plan to increase service between our major city pairs in future months."

For now, Pan Am has suspended service between New York's Kennedy Airport and Nassau in the Bahamas, Ponce, Puerto Rico and Santo Domingo in the Dominican Republic, but will continue to offer connecting service to the Bahamas via code-share partner Paradise Airlines.

Pan Am also says it will try to accommodate Ponce passengers on its flights between New York and San Juan.

The furloughed employees will be flight personnel and staff at Pan Am's Miami headquarters and Dania, Florida operations base. After the staff reductions, Pan Am will employ 1,250 people, and offer 44 daily flights to 14 cities, the airline says.