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John H. Porter, a New York public relations executive who often travels to Washington, thinks Pan Am's shuttle is more comfortable and offers better food than Eastern's.
Of the 80 shuttle flights Mr. Porter has taken in the last year, however, 70 have been on Eastern, largely because he prefers Eastern's frequent flier plan.
Mr. Porter, chairman of Doremus Porter Novelli, typifies why the year-old Pan Am shuttle has fallen short of expectations. Though passengers like Pan Am's service, they regard its location at the Marine Terminal as remote. Pan Am hasn't been able to counter Eastern's frequent flier program or erode its status as a 26-year-old New York institution.
Pan Am had hoped to reach the shuttle's first anniversary on Oct. 1 with 50% of the 4.2 million passenger-per-year shuttle market and some $10 million in operating profits. Instead, Eastern still carries twice as many passengers, and the Pan Am shuttle continues to lose money.
"Although we're close to expectations, we haven't met them yet and clearly haven't exceeded them," says Bruce R. Nobles, the amiable 40-year-old president of Pan Am Corp.'s shuttle subsidiary.
Pan Am spent nearly $100 million to get into the hourly New York-Boston-Washington shuttle business after New York Air was forced out because of antitrust concerns. Pan Am Corp. Chairman C. Edward Acker saw the shuttle as a way to "reaffirm our commitment to New York -- the corporation's headquarters and flagship gateway."
A year later, the shuttle's future is clouded by factors that go beyond the dogfight with Eastern. The financially troubled parent company has threatened to unload the shuttle unless its unions agree to $180 million in concessions. A shake-up in Pan Am's ownership and top management may be in the works, with uncertain consequences for the shuttle unit.
Eastern officials seize on the situation. "We're not subject to rumors about going away," John M. Siefert, vice president of the Eastern Air-Shuttle Division, says pointedly.
Amid the uncertainty, there's no doubt that Pan Am has established a service that gets high marks from many fliers. An unscientific Crain's survey...