Pan American World Airways

Pan American World Airways, commonly known as 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.

History

Formation

Juan Trippe surveying his office globe.

Pan American Airways Incorporated was founded in 1926 by John K. Montgomery, President, and Richard B. Bevier, Vice President, as a seaplane service from Key West, Florida to Havana, Cuba. However, they were soon muscled out of control by entrepreneur Juan Terry Trippe, whose connections controlled the access to needed U.S. air mail contracts. Under Trippe the company 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 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 1920s and early 1930s, 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.

Pan Am's seaplane terminal at Dinner Key in Miami, Florida was a hub of inter-American travel during the 1930s and 1940s.

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

The Boeing 314 "China Clipper"'s reign over the Pacific was cut short by World War II.

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 "Clippers"—the name harking back to the 19th century clipper ships—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 American's fleet was quickly replaced by faster conventional aircraft such as the Boeing 377, Douglas DC-6, and Lockheed Constellation.

Pan American Airways 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. In 1950, shortly after beginning around the world service and developing the concept of "economy class" passenger service, Pan American Airways, Inc. was renamed Pan American World Airways, Inc. 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) and widebody aircraft (the Boeing 747, for which Pan Am was the launch customer with about 25 orders in 1968). It was also one of the first three airlines to sign options for Concorde, but like other airlines which took options except British Overseas Airways Corporation and Air France, it did not actually purchase the supersonic jet. It was also a potential customer for the abandoned Boeing 2707, the American supersonic project that never got off the ground.

Pan Am operated its first transatlantic Boeing 707 flight in 1958, inaugurating the Jet Age in the United States.

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 (16,000 m²) roof, suspended far from the outside columns of the terminal below by 32 sets of steel posts and cables. The terminal was designed to allow passengers to board and disembark via stairs without getting wet by parking the nose of the jets under the overhang. The introduction of the jetbridge made this feature obsolete.

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; a fictional Pan Am Space Clipper or commercial space shuttle (the Orion III) had a prominent role in Stanley Kubrick's film 2001: A Space Odyssey, and was also featured in the poster.

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 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. In 1981 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 Airbus A310, and Airbus A320, although the A320 aircraft were never delivered.

After the Lockerbie disaster, 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 Airlines, 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. During that time, Pan Am continued to incur heavy losses. Finally, its operations ended on December 4, 1991, when Delta cut off its support. Pan Am's last remaining hub, at Miami International Airport, was split during the following years between United Airlines (which took most of the routes) and American Airlines (which took most of the terminal space).

Pan Am's resurrections

Pan Am II

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 trustee 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.

Pan Am III

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 American Airlines with a fleet of seven Boeing 727s, flying to nine cities in New England, Florida, the Canadian Maritimes and Puerto Rico. Pan Am had cooperative service arrangements with Boston Maine Airways. Guilford ceased operating Pan Am on November 1, 2004, but operations were transferred to Boston-Maine Airways, which resumed 727 service under the Pan Am "Clipper Connection" name from February 17, 2005.

IATA Code

Pan Am still uses the IATA code PA.

External links

• Fly PanAm (http://www.flypanam.com/)
• Pan American Historical Foundation (http://www.panam.org/)
• History of the three incarnations of Pan Am (http://www.panamhistory.com/)
• University of Miami Archives, Pan Am records from 1927 thru 1991 (http://www.library.miami.edu/archives/panam/pan.html)
• Historical timetables and route maps (http://www.airchive.com/SITE%20PAGES/TIMETABLES-PAN%20AM.html)
• PanAm Documentary Home (http://www.panamdoc.com/)
• Pan American World Airways, Queen of The Skies PAN AM (http://www.panamair.org/)

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