On January 11, 1999, approximately 1430 local, a Pan Am 727 ferry flight, Flight 2040, registration N535PA was departing Denver International Airport, runway 7. As the crew of 4 accelerated to rotation speed, the #3 engine failed. The incident occured just before V2 and the pilot continued the rotation and initial climb. The pilot was directed back into the flight pattern and landed back at DIA, runway 7.
None of the 4 crew members were injured, but the aircraft sustained substantial damage. The ferry flight, which originated from DIA to Los Angeles, California, was being operated in visual meteorological conditions at the time of the accident. An IFR flight plan had been filed for the flight
In a post-accident interview, the pilot said that the fire handles were pulled as a safety precaution, but no fire was reported

The engine was examined and tested at the scene. It was found that faulty wiring within the engine chamber caused the engine failure