Today in Aviation Marks 30 Years Since Pan Am Ceased Operations

John Hill, CC BY-SA 4.0 , via Wikimedia Commons

LONDON – Today in Aviation marks 30 years since one of the aviation industry’s most well-known, glamorous, and respected airlines ceased operations. And that is Pan Am.

From the not so hard to recognize flight attendants, to the airline being featured in movies such as Catch Me If You Can, Pan Am’s 64-year service of operations far spans above that number.

This piece will look into the history of the carrier, as well as its famous points, before discussing the ceasing of operations and much more!

Where it all started…


Photo: Chris Sloan of The Airchive

The airline started out under the incredible leadership of Juan Trippe back in October 1927, more than 94 years ago, when operations began.

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It is key to note that the airline was formed by United States Army Air Corps officers Henry Arnold, Carl Spaatz, and John Jouett after concerns of growing influence from the German-owned Columbian carrier SCADTA who were lobbying furiously for landing rights in the Panama Canal Zone (Daley, 1980).

Juan Trippe’s involvement came following the forming of the Aviation Corporation of the Americas as well as some other financiers that came together in partnership.

All of the other airlines provided aircraft to Trippe as Pan Am struggled to acquire so many aircraft.

Of course, in terms of tensions around about this time, the U.S Government placed Pan Am into certain protective bubbles that would deem it “as the chosen instrument for US-based international air routes” (Bilstein, 2001).

Photo: Chris Sloan of The Airchive.

Pan Am operated scheduled airmail and passenger services between Key West and Havana, to begin with.

Photo: Chris Sloan of The Airchive
Photo: Chris Sloan of The Airchive

Within the first few years of operations, Trippe took the plunge and expanded operations with a fleet of flying boats as well as adding transatlantic and transpacific routes respectively.

The airline is very well known for the “Clippers”. This started out in 1931 when Sikorsky S-38 and S-40 boats with the nicknames American Clipper, Southern Clipper, and Caribbean Clipper operated around the Latin America area.

There were to be a total of 28 Clippers in service between 1931 and 1946.

Some notable big routes for the airline at that time were one starting in San Francisco then passing through Honolulu, Hong Kong, and then Auckland subsequently.

All these little elements, of course, elevated Trippe’s airline up until the peak between the 1950s to the 1970s.

The Peak…


Photo: Chris Sloan of The Airchive
Photo: Chris Sloan of The Airchive
Photo: Chris Sloan of The Airchive

The end of the Second World War was a significant opportunity for the airline to expand and modernize itself as a brand.

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Pan Am joined in on the transatlantic travel hype in 1946 following American Overseas Airlines (AOA) being the first carrier to begin land-plane service across the Atlantic.

The airline went in strong with seven flights a week from LaGuardia Airport, five of which headed to London and two to Lisbon, using its Douglas DC4s.

However, with the likes of Trans World Airways ordering Lockheed Constellations, Pan Am quickly followed suit in order to keep up with how fast the market was progressing.

The Jet Era

And from there, the airline grew in substantial size in moves such as the acquisition of AOA and placing an order for 45 Douglas DC-6Bs. As such aircraft continued to develop, Pan Am was on top of purchasing them as this particular market was about to form the foundations of further success.

Photo: Chris Sloan of The Airchive

By 1955, Pan Am was becoming well versed with the jet age as it became the launch customer of the Boeing 707, of which placed an original order for 20.

That along with the Douglas DC-8 represented investments of over $269 million, with the first jet-based services commencing between New York Idlewild and Paris Le Bourget.

For the Supersonic part of the jet era, Pan Am did have options signed with Aerospatiale-BAC for the Concorde but never took them up on it. It did, however, sign for the Boeing 2707 SST but of course, Congress withdrew the funding on this, therefore not bringing the project to fruition.

The Widebody Era

The 50s and 60s were progressing so quickly in terms of jet aircraft, including when Boeing brought the 747 into existence, of which Pan Am placed an order to 25 in April 1966 for a price tag of $525 million.

The first flight of that aircraft was with Clipper Young America as it commenced a flight from New York’s JFK to London Heathrow.

Such aircraft in that era elevated Pan Am to the position of the carrier handling 11 million passengers in 1970, which was an incredible feat at the time.

Massive Fleet Progression in the Peak…

As the 60s and 70s rocked up, the airline invested in a plethora of different aircraft manufacturers, with the carrier having aircraft such as:

Photo: Chris Sloan of The Airchive
Photo: Chris Sloan of The Airchive
Photo: Chris Sloan of The Airchive
  • DC-8
  • B747
  • B720Bs
  • B727s
  • B737s
  • B747SPs
  • Lockheed L1011s
  • McDonnell Douglas DC-10s
  • Airbus A300s
  • Airbus A310s
  • And more!

This enabled the carrier to take in different revenue streams across many different route portfolios around the U.S and the globe.

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For example, by the end of the 70s, Pan Am had around 22.8 billion revenue passenger miles and was far more notorious than the likes of National Airlines’ figure of 8.29 billion (IATA, 1981-89).

The Downfall Begins…


Jon Proctor (GFDL 1.2 http://www.gnu.org/licenses/old-licenses/fdl-1.2.html or GFDL 1.2 http://www.gnu.org/licenses/old-licenses/fdl-1.2.html), via Wikimedia Commons

As we entered the 70’s and 80’s, Pan Am was faced with a lot of different issues, both self-inflicted, but also from external pressures within the industry.

With the airline restructuring both its fleet and its financial strategy, the subsequent two decades from the ’70s to the ’90s was not a fun time for the carrier at all.

The 1973 Oil Crisis & Federal Bureuacracy

The 1973 oil crisis and shortage caused a reduced percentage of consumers using air travel, but at the same time, such overcapacity did make things worse.

Its overheads were large enough due to the fuel prices rising exponentially as well as the older aircraft in the fleet requiring more fuel.

Eduard Marmet, CC BY-SA 3.0 http://creativecommons.org/licenses/by-sa/3.0/, via Wikimedia Commons

At the same time as well, Pan Am was taking to the media to attack the U.S Government over federal policies in the United States that meant international competitors could operate into the U.S at a fraction of a cost.

One example was down to airport discrepancies in airport landing fees, where it would have cost Pan Am $4,200 to land a plane in Sydney whereas the likes of Qantas would only be charged $178 to land a plane in Los Angeles (Conrad, 1999).

Building a U.S Domestic Network Became Harder

After deregulation occurred in the U.S, Pan Am attempted to build a U.S domestic network even stronger than it had previously through trying to merge or acquire other competitors and their networks.

However, after competitors convinced the U.S Congress that Pan Am would use its political footing to monopolize air routes, requests made by Pan Am were subsequently denied, causing them to only operate internationally (Robinson, 1994).

Photo: Wikimedia Commons

After deregulation became a thing in 1978, more carriers began competing with Pan Am as a result on the international stage.

Whilst it was able to acquire feeder networks through either contract or through incorporating east coast shuttles, it only provided an incremental feed to the revenue streams of the airline, meaning growth couldn’t be maximized as effectively.

This was seen even through the acquisition of National Airlines, which placed a $437 million hole in the balance books (Key Publishing, 2011) as well as a failed $246 million bid for Northwest Airlines, which never came to fruition (Gandt, 1995).

Lockerbie & The 1990-91 Gulf War

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The Lockerbie Disaster of Pan Am 103, as well as the 1990-91 Gulf War, were seen as the final two nails in the coffin for the airline before it ceased operations.

Lockerbie was a massive terrorist disaster and didn’t just affect the lives of many, but it knocked confidence in air travel, which of course knocked confidence in the Pan Am name and the way airport security works.

Jon Proctor (GFDL 1.2 http://www.gnu.org/licenses/old-licenses/fdl-1.2.html or GFDL 1.2 http://www.gnu.org/licenses/old-licenses/fdl-1.2.html), via Wikimedia Commons

The 1990-91 Gulf War resulted in fuel prices rising once again, but also for Pan Am to make a difficult decision in terms of valuable transatlantic slots.

As a result of those two combined factors, the airline sold most of its London Heathrow routes to United Airlines, leaving the carrier with only two daily London flights as well as selling most of its IGS routes to Berlin to Lufthansa as well (Flight International, 1990).

Whilst the aforementioned factors were crucial in the downfall of the carrier, there were so many other tiny issues and problems that the airline faced which ultimately led to its demise.

The End of Operations…


Pan Am’s end of operations began in January 1991 when it was forced to file for bankruptcy protection (Register-Guard, 1991).

This caused Delta Air Lines to purchase the remaining, yet profitable assets, of the carrier for around $416 million, which consisted of:

  • Remaining European routes (Except one Miami to Paris route).
  • Frankfurt mini hub.
  • East Coast Shuttle.
  • 45 aircraft.
  • The Pan Am Worldport at JFK.

On top of this, Delta placed an additional $100 million injection into Pan Am in exchange for a 45% stake, with the airline’s creditors holding the other 55% (Flight International, 1991, p. 20).

By October 1991, Russell Ray Jr. was given the title of President and CEO of Pan Am and was subsequently put in charge of restructuring the airline for a re-launch.

Such a re-launch included 60 aircraft that would have produced around $1.2 billion in annual revenue with 7,500 employees working there.

Image sourced from Chris Sloan of The Airchive.

Now, of course, when the re-launch occurred, this didn’t go exactly to plan. Revenue targets were not being hit and all the way up to the ceasing of operations in December 1991, it was losing around $3 million per day (Flight International, 1991).

And of course, once the ceasing was announced, all hell broke loose on the Delta Air Lines side.

Pan Am creditors went after Delta for $2.5bn, as well as Pan Am employees also going after the carrier, but the judge ruled in favor of Delta, stating that Pan Am did not go into bankruptcy because of the popular U.S carrier.

Overall


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For an airline with huge success over its 64-year life, it was a shame that it ceased operations for the reason it did.

AviationSource got to speak with Chris Sloan of The Airchive about the 30th anniversary of operations being ceased, with today being his birthday as well. Via Facebook, he had the following sentiments to share about the carrier:

“Pan Am and I have today’s date, December 4th in common. It is my birthday, but it’s also the day the legendary airline that changed the world disappeared from the skies in 1991.”

“Today is the thirtieth anniversary of that somber day. I was at Miami International Airport to see it happen. I’ll never forget the tears of the Pan Am family as those last flights arrived into MIA.”

“But I prefer to celebrate and honor The Chosen Instrument (as it was called) with a visit to the airline’s first ticket office in Key West, the city where it all began. It’s just down the street from our second home in the Conch Republic.”

“Pan Am inaugurated its first flights between Key West and Havana on October 28, 1927, as seen in this timetable. This was America’s first overseas flight. The office has been many restaurants and bars over the years, such as Kelly’s owned by Kelly McGillis .”

“It’s currently First Flight Island Brewery. There’s a modest collection of memorabilia here. Anyway, In some of these maps, you see Pan Am’s far-flung international services at the height of its dominance as America’s (unofficial) International Flag Carrier.”

“All of Pan Am’s accomplishments are too long to list here, but here’s a few: First scheduled flights linking America mainland with Hawaii, Asia, Europe, and Latin America with the majestic flying boats (including the famous China Clipper); played a significant role in the WWII war effort, introduced the first Boeing 747 and 707 jets into commercial service, first to fly a sitting President while in office (FDR to The Malta Talks) and actually sold tickets to the moon (though never operated of course), bought affordable air travel to the masses.”

Eduard Marmet, CC BY-SA 3.0 http://creativecommons.org/licenses/by-sa/3.0/, via Wikimedia Commons

“The airline achieved its pinnacle in the mid-1970s, some say earlier. The latter years weren’t kind to The World’s Most Experienced Airline: enhanced competition losing its international long-haul duopoly with TWA, massive debt from the 747s, ill-fated merger with National to gain a domestic network in the deregulation era, hijackings, and of course the devastating terrorist bombing over Lockerbie.”

“At the end, Pan Am which once spanned the globe had sold off its Pacific Asian routes (to United), Europe (with exception of Paris), and Heathrow (to United). It had planned to go back to its Latin American roots-based from Miami with financial support from Delta.”

“Losing $3 million dollars a day, the plug was pulled 30 years ago today with the last scheduled flight operating from Barbados to Miami. 30 years since its demise, Pan Am might be gone but is definitely not forgotten.”

“The globe “meatball” logo is still one of the most famous in the world. In terms of innovation and importance, the airline was the internet of its day in how it rewired the world.”

Arthur Tress, Public domain, via Wikimedia Commons

“The glamor of its service and crews is still recounted in movies, TV shows, and books. Its Founder Juan Trippe was the Elon Musk of his day. Some pilots like Ed Musik were known as Sky Gods and Masters of Flying Boats were international celebrities and heroes.”

“Juan Trippe’s airline changed our world and shrunk our world – for the better. On my 53rd trip around the sun, a toast to the airline and its people for whom the sky was never the limit. Here’s to you Pan Am!”

Mr. Sloan couldn’t have said it better. The airline has most definitely made a mark and we will for sure miss this airline but it definitely will not be forgotten!

P.S: Happy Birthday Chris!

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References:

About the author

James Field

James is a passionate AvGeek based in Manchester, U.K who has been actively spotting for years. James is the Editor-in-Chief for the company.

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