Pan Am Debuts Shuttle to Take On Eastern’s

WASHINGTON —  Pan American World Airways, which long ago opened the Pacific to air travel, is jumping into the scramble for business travelers in the Northeast, where the hourly Eastern Airlines shuttle has dominated for 25 years.

The Great Shuttle War unfolds today with a 6:30 a.m. EDT Washington-New York flight by Pan Am’s new shuttle subsidiary. Pan Am officials are optimistic that the new venture, with an estimated $75 million to $100 million start-up cost, will pay off, but Eastern officials say they’ve seen competition before.

The new competition is not expected to mean savings on fares, however. Both Eastern and Pan Am executives say they have no plans to start a fare war. “It’s not a price-sensitive market. . . . We do not intend to get into a price war,” said Bruce Nobles, president of the new Pan Am shuttle subsidiary.

This duel for largely business travelers along the world’s busiest commercial air corridor is expected to be fought over free snacks and beverages, seat selection, convenience, spruced-up terminals and frequent-flyer bonuses.

Since 1961, Eastern Airlines has ruled the hourly air shuttle service between Washington, New York and Boston, carrying more than 60 million passengers at a current rate of 3 million a year.

Pan Am is ready to take on Eastern with hourly flights on the half-hour--Eastern’s flights are on the hour--for a total of 15 flights a day out of each of the three cities. Like Eastern, Pan Am will have a backup aircraft ready if the regular flight is full--even for a single passenger.

Nobles said he expects Pan Am to attract half of the shuttle market within a year and turn a profit of about $10 million in the first year. He sees Pan Am carrying between 1.5 million and 2 million passengers annually on its shuttle aircraft.

Eastern officials won’t disclose its profits on the shuttle, incorporating those figures in the airline’s overall figures, but spokeswoman Paula Musto said the shuttle service has “consistently been profitable.”

The high-profile contest for Northeast business travelers is hoped to give both a financial and psychological boost to Pan Am, which last year sold its Pacific division through which it pioneered commercial air travel to Asia in the 1930s.

Senior Pan Am officials say they hope the new shuttle subsidiary will generate business for other Pan Am flights. But industry analysts are divided on Pan Am’s prospect for success.

Some critics say Pan Am does not have the managerial savvy to tackle the well-entrenched incumbent in the shuttle market. Others say that Eastern’s shuttle operation long has left something to be desired and that the business crowd using it is ready for a choice.