Charter specialist Pan American has moved to acquire US domestic carrier Kiwi International Airlines, which has been grounded by the US Federal Aviation Administration for "numerous" safety violations.

Kiwi's three Boeing 727s were taken out of service a day after the US Department of Transportation (DoT) threatened to revoke the Newark-based carrier's operating certificate for failing to meet federal standards for Part 121 (major airline) carriers.

The FAA action also followed Kiwi's second Chapter 11 bankruptcy filing, which revealed the airline's $3 million cash infusion from Pan Am. Kiwi says Pan Am "was expected to bid on the assets of Kiwi" when the federal bankruptcy court set a sale date.

The DoT says Kiwi is in dire financial straits, owing $750,000 to several airports. It showed a net loss of $21 million last year, and has assets worth $12 million with liabilities of $35 million.

Kiwi owner Charles Edwards hired turnaround specialist Eugene Gillespie to take charge this month, but the DoT expressed concern about the changes, noting that neither man had aviation management experience.

Pan Am was acquired in federal bankruptcy court by Guildford Transportation last June.

Source: Flight International