Online Encyclopedia
Pan American World Airways
Pan American World Airways, Inc. (Pan Am) was the United States' principal international airline from the 1930s until its collapse in 1991, and was credited with many innovations that shaped the international airline industry. An attempt was made to revive the company in the late 1990s, but the new Pan Am ultimately ended up facing bankruptcy again and the name was sold in 1998. The current owners of the Pan Am brand operate a small number of flights within the continental United States, to Puerto Rico and to the Dominican Republic.
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History
Formation
Pan Am was founded by aviator Juan Terry Trippe as a seaplane service from Key West, Florida to Havana, Cuba, and operated its first southbound flight on October 28, 1927. The U.S. government approved Pan Am's contract with little objection, out of fears that the German-owned Colombian carrier SCADTA would not have any competition in bidding for routes between Latin America and the United States. Pan Am filled its two Fokker Trimotor s by soliciting passengers on Florida trains and in Havana nightclubs.
Trippe and his associates planned to extend Pan Am's network through all of Central and South America. During the late 1920's and early 1930's, Pan Am purchased a number of ailing or defunct airlines in Central and South America, and negotiated with federal postal officials to win most of the government's air mail contracts to the region. In September of 1929, Trippe toured Latin America with Charles Lindbergh in order to negotiate landing rights in a number of countries, including SCADTA's home turf of Colombia. By the end of the year, Pan Am offered flights down the west coast of South America to Peru. The following year, Pan Am purchased the New York, Rio, and Buenos Aires Line (NYRBA), giving it a seaplane route along the east coast of South America to Buenos Aires, Argentina, and westbound to Santiago, Chile.
In 1929, Pan Am's holding company, the Aviation Corporation of the Americas, was one of the hottest stocks on the New York Curb Exchange , and flurries of speculation surrounded each of its new route awards. On a single day in March, its stock rose 50% in value. Trippe and his associates had to fight off a takeover attempt by the United Aircraft and Transport Corporation in order to keep their control over Pan Am. (UATC was the parent company of what are now Boeing, Pratt & Whitney, and United Airlines.)
The Clipper era
While Pan Am was developing its South American network, it also negotiated with Britain and France to begin seaplane service between the United States and Europe. Britain's parastatal Imperial Airways was eager to cooperate with Pan Am, but France was less willing to help, as its state carrier Aeropostale was a major player in Latin America and a competitor of Pan Am on some routes. Eventually, Pan Am reached an agreement with both countries to offer service from Norfolk, Virginia to Europe via Bermuda and the Azores using Sikorsky S-40 flying boats. Pan Am also procured an air mail contract from Boston to Halifax, preparing for North Atlantic flights in the future.
Pan Am also planned to begin land plane service over Alaska to Japan and China, and sent Lindbergh on a successful survey flight in 1930, but the ongoing political upheaval in the Soviet Union and Japan made the route unviable. Trippe then decided to begin service from San Francisco to Honolulu, and from there to Hong Kong and Auckland, following the existing routes of steamships. After negotiating rights to land at Pearl Harbor, Midway Island, Wake Island, Guam, and Subic Bay in 1934, Pan Am shipped $500,000 worth of aeronautical equipment westward in March of 1935, and ran its first survey flight to Honolulu in April with a Sikorsky S-42 flying boat. The Post Office opened up bids for a San Francisco-Canton mail route later that year, and Pan Am won the contract, running its first commercial flight in a Martin M-130 on November 22 to massive media fanfare. Later, Pan Am used Boeing 314 flying boats for the Pacific route: in China, passengers could connect to domestic flights on the Pan Am-operated China National Aviation Corporation (CNAC) network.
The "Clipper s," as they were called, were the only American passenger aircraft of the time capable of intercontinental travel. Most of the Clippers were impressed into the military during World War II: during this era, Pan Am pioneered a new air route across western and central Africa to Iran. Early in 1942, Pan Am became the first airline to operate a route circumnavigating the globe. Star Trek creator Gene Roddenberry was a Clipper pilot during the 1940s, and was aboard the Clipper Eclipse when it crashed in Syria on June 19, 1947.
Postwar developments
After the war, Pan Am's fleet was quickly replaced by faster conventional aircraft such as the Boeing 377, Douglas DC-6, and Lockheed Constellation. Pan Am also lost its distinction as the United States' official international airline: first to American Overseas Airways, and later to a number of carriers designated to compete with Pan Am in certain markets, such as TWA to Europe and Northwest Orient to East Asia. With competition on many of its routes, Pan Am began investing in new innovations such as jet aircraft (the Boeing 707, which Boeing, under pressure from Pan Am, modified to seat six across instead of five), widebody aircraft (the Boeing 747, for which Pan Am was the launch customer with about 25 orders in 1968), and even supersonic aircraft (as a launch customer for the Concorde and as a potential customer for the abandoned Boeing 2707).
In 1962, with traffic increasing, Pan Am commissioned IBM to build PANAMAC, a large computer that booked airline and hotel reservations, and held very large amounts of information about cities, countries, airports, aircraft, hotels, and restaurants. The computer came to occupy the fourth floor of the Pan Am Building, which was then under construction in Manhattan and which was to be the largest commercial office building in the world for some time. Pan Am also built "Worldport," a terminal building at JFK Airport that was the world's largest airline terminal for many years, distinguished by its elliptical, four-acre roof, suspended far from the outside columns of the terminal below by 32 sets of steel posts and cables.
Pan Am held a lofty position in the popular culture of the Cold War era. Perhaps the most famous image of the company was The Beatles' 1964 arrival at JFK Airport aboard a Pan Am DC-8, Clipper Defiance (which was eventually broken apart in Long Beach, California). During the Apollo program, Pan Am sold tickets for future flights to the moon, and these later became valuable collectors' items: the moon flights were even depicted in Stanley Kubrick's film 2001: A Space Odyssey.
Downturn
The 1973 energy crisis spelled the beginning of Pan Am's downfall. A combination of high fuel prices, low demand for air travel, and oversupply in the international air travel market (partly caused by federal route awards to other airlines, such as the Transpacific Route Case) caused Pan Am's load factors and profit margins to shrink. Like other major airlines, Pan Am had invested in a large fleet of new 747s with the expectation that demand for air travel would continue to rise. This proved not to be the case. To stay competitive with other airlines, Pan Am began trying to make an inroads in the U.S. domestic market. After several failed attempts to win approval for domestic routes, the enactment of airline deregulation finally allowed Pan Am to begin flights between its five U.S. gateways in 1979. Around this time, Juan Trippe, who had been in retirement for about ten years, died.
In 1980, Pan Am grew a domestic route network overnight by absorbing National Airlines. However, a bidding war caused Pan American (under the direction of Chairman William Seawell) to pay far more than the actual value of National Airlines, putting the airline deeper in debt. The combined company continued to accumulate debt due to incompatible fleets, incompatible route networks (National's operations concentrated on Florida), and incompatible corporate cultures. Seawell attempted to save the airline by selling off some of its assets, including the Pan Am Building (to MetLife in 1981) and the company's entire Pacific route network (to United Airlines in 1985). The extra money was invested in new aircraft such as the Lockheed L-1011, Airbus A310, and Airbus A320.
After Pan Am Flight 103 crashed in 1988, the airline finally fell apart. Travel agents avoided booking passengers on Pan Am for fear that passengers had begun to associate danger with Pan Am. In March 1991, the airline sold off its profitable London Heathrow routes (arguably Pan Am's biggest international destination) to United, leaving Pan Am with only two daily flights to Gatwick.
The Gulf War brought transatlantic air traffic to a trickle and brought Pan Am to a financial breaking point. In August of 1991, Pan Am declared bankruptcy. Delta Air Lines purchased the remaining profitable assets of Pan Am, including its remaining European routes and the JFK WorldPort, and injected some cash into a smaller Pan Am predominantly serving the Caribbean and Latin America. Pan Am continued to incur heavy losses and only survived until December 4, 1991, when Delta cut off its support. Pan Am's last remaining hub, at Miami International Airport, was split between United (which took most of the routes) and American Airlines (which took most of the terminal space).
Pan Am's resurrections
A new investment group including Charles Cobb (the former Ambassador to Iceland) purchased the rights to the Pan American brand after the original carrier declared bankruptcy in 1992. In September 1996, Pan Am II was started, with an Airbus A300 called Clipper Fairwind. The goal was to provide low cost, long distance travel to major US and Caribbean cities. The new airline was headed by the last Vice-Chairman and Chief Operations Officer of Pan Am, Marty Schugrue, who also helped in the creation of the Frequent Flyer program and who served as President of American Airlines and later truste of the Eastern Airlines estate. Pan Am II soon merged the troubled Carnival Airlines, the rapid expansion and economic troubles to the two companies was too much for the new Pan Am II, it only survived for two years before declaring bankruptcy ceasing operations in 1998.
In 1998, the Pan Am brand was sold to Guilford Transportation Industries, a railroad company headed by Tim Mellon of the Pittsburgh bank family, and launched Pan Am III with a fleet of seven Boeing 727's, flying to nine cities in New England, Florida, and Puerto Rico. Pan Am has cooperative service arrangements with Boston Maine Airways .
IATA Code
The current incarnation of Pan Am uses the IATA designator code PN. The original Pan Am used the designator code PA.
External links
- Fly PanAm
- Pan American Historical Foundation
- History of all three Pan Am's
- University of Miami Archives, Pan Am records from 1927 thru 1991
- Historical timetables and route maps
- PanAm Documentary Home
- Pan American World Airways, Queen of The Skies PAN AM
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