Pan Am History & Guide

Many airlines became icons of global aviation, but only Pan Am can claim to have created the scene as we know it. I was born after the demise of the original Pan Am but grew up hearing loud praises of the company.

Pan Am came to be in 1927 as Pan American Airways. The company began as a modest move to bolster the US presence in the Central American market before becoming the leading airline in the world.

Pan Am defined the standard for luxury long-haul travel, with the naval uniforms, exciting destinations, and the jet airliner as the heart of the industry. Many aspects that made Pan Am so special also became its undoing.

I have been in love with the Pan Am aesthetics and legacy for as long as I can remember. The revolution of the airline industry deserves all the praise it gets. At the same time, its collapse and the steps leading to it are just as fascinating! Learn all about it in this Pan Am History & Guide

Quick Summary

Rise

• Founded in Key West on 1927
• Heavy focus on flying boats through Latin America into the 1930s
• Major transoceanic expansion from 1934

Peak

• Auxiliary military work in World War 2
• End of the Clipper era by 1946
• First Boeing 707 operator in 1958
• Peaked in 1968 with destinations in 86 countries and almost 7 million yearly passengers

Fall

• Heavy losses from the oil crisis and airline deregulation in the 1970s
• Poorly-planned acquisition of National Airlines skyrocketed costs
• Cutting costs and restructuring during the 1980s
• Reputation hit by the 1988 Lockerbie bombing
• Bankruptcy following rising fuel costs due to the First Gulf War

Pan Am History

Early Days

Pan Am began as Pan American Airways Incorporated in March 1927 to counter German influence over the Panama Canal through SCADTA, a Colombian airline. For a while, it existed as a shell company owned by US Army officers Henry Arnold, Carl Spaatz, and John Jouett.

The United States Post Office requested bids for an airmail delivery from Key West to Havana. SCADTA had its subsidiary compete for the contract, so Pan Am rushed to match the offer. The fledgling airline won the contest late that summer, but it had no aircraft or landing rights, and time was running out.

Pan Am partnered with Juan Trippe of the Aviation Corporation of the Americas (ACA) and Dominican carrier West Indian Aerial Express to fulfill the contract. The ACA held the landing rights in Havana, and the West Indian Aerial Express leased a Fairchild FC-2 seaplane. The first Pan Am flight touched down in Havana on the deadline day, carrying 250 pounds of mail.

The partnership led to a merger in June 1928 as the Aviation Corporation of the Americas, of which Pan Am became a subsidiary under the control of Juan Trippe. Pan Am held onto the postal contract between Key West and Havana, but this was only the beginning.

Latin Expansion

Pan Am became the first international airline based in the United States, and the American government wanted it to grow. Pan Am had a de facto monopoly on international routes.

Juan Trippe acquired several failed airlines in Latin America with their landing rights, facilities, and fleets. By the end of 1929, ACA had established subsidiaries and routes using flying boats down to Buenos Aires and Lima. The Caribbean expansion relied on landing rights and aircraft from Mexicana de Aviación, which continued to exist but with ACA holding a controlling stake.

Despite the market crash of 1929, ACA continued its expansion. Two years later, the company officially changed its name to Pan American Airways Corporation, matching that of its leading subsidiary.

The Clipper Mania

The Clipper era started in earnest in 1931. Pan Am introduced three Sikorsky S-40 flying boats and named them Caribbean Clipper, American Clipper, and Southern Clipper. The fleet eventually grew to 28 aircraft, running services across the coastal Americas. Pan Am replaced the flyboy look of leather jackets and scarves with uniforms mimicking those of naval officers.

The Sikorsky S-42 enabled Pan Am to enter the transoceanic market. In 1935, the airline began service from the West Coast to Auckland and Hong Kong. Other Asian routes followed shortly. Pan Am’s exploits in expanding the first American international airline empire earned it the Collier Trophy of 1937.

In 1937, Pan Am began pushing toward Europe. Deals with the French and British governments launched routes shared with airlines such as Imperial Airways. The Portuguese Azores archipelago proved crucial to the flow of flying boats to and from Europe.

After successful mail routes, a Boeing 314 flew the first Pan Am transatlantic passenger flight in March 1939 from Baltimore to the Portuguese capital of Lisbon with a stopover in Horta, Azores. Similar services to the United Kingdom, Ireland, and France followed shortly.

Pan Am at War

The Second World War only reached the United States in December 1941 with the Japanese attack on Pearl Harbour, but Pan Am saw combat before that. The company owned the China National Aviation Corporation. One of its Douglas Dolphin flying boats was destroyed in the summer of 1937 when the Empire of Japan invaded China.

The outbreak of hostilities in Europe in 1939 forced Pan Am to cut its flights to Southampton short, ending the route in Foynes, Ireland. Civilian transatlantic services continued until 1941.

Once the United States entered the war, the American military commandeered large parts of the Pan Am fleet for airlift duties. The airline helped the Allied war effort in many ways.

One of its most noteworthy contributions was helping develop a key supply route where aircraft, assorted vehicles, supplies, and personnel moved down from the United States to assembly points on the Brazilian northeast coast, then flew to West Africa. From there, the goods reached their units in Africa or Europe.

This logistical wonder played an unintended role in dragging Brazil into the war as well, as German submarines began targeting Brazilian vessels in retaliation for lending bases to the Allied war effort.

The Post-War Competition

When the guns fell silent in 1945, the airline market looked completely different from the pre-war days. Developments driven by wartime needs led to the dissemination of aircraft and airport infrastructure capable of long-range flights. Pan Am had the world at its feet, but if the possibilities were great, the demands for air travel outpaced them.

A single airline could not handle the load alone, so the United States government rescinded most of the protections that Pan Am had enjoyed since its founding. No company could vaguely match the Pan Am portfolio, but there were enough competitors to target it piecemeal.

Trans World Airways (better known as TWA) would emerge as its biggest rival under the stewardship of eccentric aviation legend Howard Hughes. Hughes engineered a marketing masterplan for TWA, relying on the new Lockheed Constellation to make transatlantic services at speeds unmatched by the Pan Am DC-4.

Transatlantic Pan Am service after the flying boat era resumed in January 1946, with flights from New York to London and Lisbon. Juan Trippe caught wind of the TWA gambit and placed a Constellation order, eventually beating TWA by three weeks to fly the first passenger service from New York to London.

Newer aircraft also reopened the door to Asia starting in 1947. Pan Am began the first regular round-the-world route, departing from San Francisco.

The newfound competition started a process to replace the pre-war Pan Am fleet. The Lockheed Constellation and Boeing 377 took over most long-haul routes, and the venerable DC-3 gave way to newer Douglas and Convair models. The old DC-3 would linger in limited Pan Am service until 1966 as one of the last props the company operated.

Inventing Jet Modernity

As the company grew through the 1950s, Juan Trippe became frustrated with the lack of innovation presented by new aircraft. Pan Am only introduced the Convair CV-340, the Douglas DC-6, and DC-7 between 1953 and 1955. They remained modest improvements on existing designs.

While the general view among airline executives was that the stagnant but refined piston engines provided adequate performance and safety, Trippe refused to believe anything other than jets could sustain operations in the future.

Pan Am observed the troubled introduction of the De Havilland Comet jetliner and placed its bets on two American designs. In 1955, Pan Am ordered 20 Boeing 707 and 25 Douglas DC-8 aircraft. Neither had flown by then.

Boeing beat Douglas to deliver the first aircraft, with the first 707-120 reaching Pan Am in 1958. The airline became its first operator with regular service from New York to Paris, with a fuel stop in Gander, Canada. Pan Am ushered in a new era in airline travel.

The Douglas DC-8 eventually arrived in 1960 with the long-range Boeing 707-320 that allowed non-stop transatlantic service.

Worldport and The Height of Pan Am

As the 1960s progressed, Pan Am looked unstoppable. One of the staples of the Pan Am success was the inauguration of Worldport in 1960. Officially Terminal 3 of JFK Airport, the building became the heart of the operations to Europe, Africa, and the Middle East. The building had a distinctive saucer roof to shield passengers from the weather when boarding and deboarding.

The company worked with IBM to develop the PANAMAC, a computer network that handled flight, hotel, and destination data. In 1963, Pan Am moved to the prestigious 200 Park Avenue building in Manhattan.

In 1966, Pan Am placed the first-ever order for the new Boeing 747. The upcoming widebody airliner would make the global reach virtually limitless. Honoring the spirit of its far-reaching flying boats, Pan Am followed the Clipper naming tradition for the Boeing 747. Clipper Young America ran the first widebody route from New York to London.

Juan Trippe wanted to keep the Pan Am momentum and signed options for the Concorde and the Boeing 2707 supersonic airliners, but the company backed out eventually. Pan Am would never operate supersonic aircraft.

In the late 1960s, Pan Am posted almost unbelievable numbers. Its 150 jets moved over 6.5 million passengers yearly to destinations across 86 countries.

Warning Signs

This story may be going great, but it is here that I suspect the crash became inevitable. It might sound weird since the mid-1960s were the Pan Am golden days, but the deadly patterns had already taken root.

Investments like PANAMAC remained grandiose but served a purpose, but other expenses are hard to call more than vanity buys.

Pan Am spent $115.5 million just for the 25-year lease on 200 Park Avenue, then took out $135 million in loans to complete the building. Extravagance made the project run out of money in the final stretch.

While having its own terminal is common practice for an airline as big as Pan Am, Worldport was decked in extravagance that exceeded functionality by a long shot.

Supersonic transports may have looked like the next big jump after widebodies. However, it was clear that their application was limited to luxury service. Pan Am did back out of the Concorde but hoped to buy at least 15 Boeing 2707 units by the time Congress pulled funding from the program.

It goes without saying that Pan Am could not have predicted the 1973 oil crisis. By the 1960s, the company boasted over $1 billion in cash reserves.

Individually, none of the Pan Am business moves were irreversible. Collectively, they reflected extravagance at a core institutional level. This attitude made Pan Am vulnerable to any threat to airline margins.

The Oil Crisis

In 1973, King Faisal of Saudi Arabia spearheaded an oil embargo by the OPEC against countries that sided with Israel in the Yom Kippur War. The move hit the United States particularly hard, and fuel costs skyrocketed.

The timing could not have been worse for Pan Am. The airline had recently introduced a large fleet of widebodies, banking on increased demand. The oil crises slashed demand for luxuries such as long-haul airline travel.

For the first time, Pan Am had way more jets than it had demand for, and its operational costs had grown tremendously due to rising fuel costs. The oil crisis exposed many of Pan Am’s organizational failures.

The oil embargo ended in 1974 thanks to a diplomatic intervention by Egyptian president Anwar Sadat, but this was not the end of Pan Am’s woes.

The Coup of the Decade

Pan Am had long sought to establish a domestic American network, but its efforts never materialized. Ironically, it had a network of short-haul routes in other continents aimed at moving passengers from smaller airports to those Pan Am operated in so they could use its services to fly to the United States.

Now under the stewardship of William Seawell, Pan Am sought to change that. The Airline Deregulation Act of 1978 had effectively stripped Pan Am of its last protections granted by the US government. This move allowed other American companies to attack Pan Am international routes at will but also meant Pan Am could hunt freely in the domestic market.

Seawell set his sights on National Airlines, hoping that absorbing its extensive domestic portfolio would change Pan Am’s fortunes. The takeover was complete by 1980 without the expected results.

Although National Airlines had a large fleet, it only shared a single type with Pan Am. Its wages were also lower, meaning operating costs suddenly skyrocketed once National Airlines workers received raises to match Pan Am standards.

The 62% growth in revenue was offset by operational expenses, including an increase in vanity expenses. The Coup of the Decade failed to save Pan Am.

The Beginning of the End

The National Airlines debacle finally set off the alarm bells at Pan Am. William Seawell oversaw a frantic disposal of assets outside the airline. Seawell secured Pan Am $500 million from selling InterContinental hotels and a 50% stake in the Falcon Jet Corporation before handing the CEO seat to former Braniff lead Charles Edward Acker.

In almost poetic irony, the company sold the Pan Am Building at 200 Park Avenue to Metropolitan Life Insurance for $400 million. Another piece of history to go was the round-the-world route. Acker ended it in 1982 due to low profits in the intra-Asian segments.

The advent of ETOPS (Extended-range Twin-engine Operations Performance Standards) certification allowed Acker to try and curb the flying circus that Pan Am experienced after the National Airlines acquisition.

Starting in 1985, Pan Am replaced most of its four-engine fleet with the new Airbus A300 and A310 widebody twin-engine airliners. That same year, Pan Am sold its Pacific division to United Airlines. This netted the company $750 million.

The main gain here was not in cash but in standardizing the Pan Am fleet again. The sale offloaded the Lockheed Tristar and DC-10 fleets, allowing the company to focus on the Boeing and Airbus fleets again.

Pan Am Express

Despite the disastrous National Airlines acquisition, starting in 1981, Pan Am contracted six carriers to fly feeder routes to hubs in New York, Miami, Los Angeles, and Berlin. Executives also acquired Eastern Air Lines and dumped $65 million into regional carrier Ransome Airlines in 1987.

Boeing 727 aircraft inherited from Eastern Air Lines flew as Pan Am Shuttle, while the others ran as Pan Am Express.

This small air force of regional aircraft flew a mix of small narrowbody jets and turboprops to move passengers across the United States and Europe to Pan Am hubs, where they could then board the luxurious long-haul flights that remained the bread and butter of the company.

Unfortunately for Pan Am, while the gamble was worthy, its results could not arrest the terminal descent.

Lockerbie and Kuwaiti Ripples

On December 21st, 1988, the Boeing 747-121 Clipper Maid of the Seas disintegrated over Scotland. Flight 103 departed Frankfurt Airport in then-West Germany and had planned stops at Heathrow (London), JFK International (New York City), and Detroit Metropolitan Airport.

The air crash investigation eventually pinpointed the cause as a bomb loaded in a suitcase stored in the forward cargo hold. The explosion and subsequent decompression sheared the nose from the fuselage.

The out-of-control Boeing 747 eventually disintegrated as it crashed around the Scottish town of Lockerbie. The crash killed all 259 occupants and another 11 people on the ground due to the falling debris.

The tragic loss of its crew, passengers, and aircraft preceded a series of federal investigations and lawsuits. The claim was that security failures from Pan Am enabled the bomb to be planted aboard the flight. The company countered that it had not been warned of heightened terrorism risks by federal agencies aware of them.

While the Lockerbie investigation would drag on for many years, the public perception was decidedly against Pan Am.

The final nail in the coffin of Pan Am came in August 1990. After the lengthy Iran-Iraq War ended in 1988, Iraqi leader Saddam Hussain invaded neighboring Kuwait. The instability in the Persian Gulf sent fuel prices up again, making even the more profitable Pan Am routes untenable.

Pan Am rushed to sell off most of its London service, the staple of its international operations for most of its history, to United Airlines, with German routes going to Lufthansa. The sales earned $1.2 billion, and Pan Am fired 2500 employees by September 1990.

The End of Pan Am

In January 1991, the company filed for bankruptcy. Delta Air Lines picked up most of the pieces, including the Worldport in JFK Airport, and purchased a 45% stake in Pan Am. The other 55% went to outstanding creditors.

In October 1991, Russell Ray Jr. took over as Pan Am CEO. He launched a restructuring program that would see the company return to its roots in servicing the Americas. The headquarters moved from New York City to Miami, and the fleet went down to 60 aircraft.

Despite the modest plans, the relaunch on November 1st did not usher in prosperity. At one point, Delta Air Lines claimed Pan Am was still bleeding $3 million daily.

On December 3rd, after a deal for a cash injection from TWA fell apart, Russell Ray Jr. canceled further reorganization plans. Pan Am was to shut down, effective immediately.

The final Clipper in the sky was Pan Am flight 436, a Boeing 727-200 from Barbados to Miami.

Failed Resurrection Attempts

A revamped Pan American Airways launched in 1996 focusing on cheap Caribbean routes. Owner Eclipse Holdings backtracked on the asset purchases, and the company folded in 1998.

Another Pan Am rose that year with a modest fleet of seven Boeing 727-200 out of New Hampshire. This revival successfully serviced secondary airports across the United States, working with Boston-Maine Airways. The latter eventually assumed Pan Am operations in November 2004.

Today, the Pan Am meatball still finds the eye of trainspotters in the United States after Guilford Transportation Industries acquired the naming rights for the company. A sad fate for the first American airline empire.

Pan Am Fleet

The Pan Am fleet is one of my favorite facets of this airline because of how diverse it is. Digging through the inventory for over half a century of service is a journey through time in commercial aviation. Pan Am strived to lead the line in the industry and started many trends that are now the backbone of all major airlines.

I have ordered the aircraft on this list by their introduction date with Pan Am to help you see how the company evolved over time.

Flying Boats

Flying boats were the flagships of the Pan Am fleet in the interwar period. Though slow and cumbersome compared to their land peers, the relatively small logistical requirements and fantastic range meant Pan Am could fly passengers farther and faster than cruise liners.

• Sikorsky S-36 (1927-1928)
• Sikorsky S-38 (1928-1943)
• Consolidated Commodore (1930-1943)
• Sikorsky S-40 (1931-1944)
• Sikorsky S-42 (1934-1946)
• Douglas Dolphin (1934-1937)
• Martin M-130 (1935-1945)
• Sikorsky S-43 (1936-1945)
• Boeing 314 (1939-1946)

Piston Props

While flying boats handled most long-range routes, Pan Am also covered shorter segments with a diverse fleet of piston airliners.

This early role grew considerably by the end of World War 2 when pressurized land-based aircraft could safely match the range of flying boats at much greater speeds.

The prop era of Pan Am lasted from its founding in 1927 until 1968 when the company retired the last of its Douglas DC-6.

Pre-1939

• Fokker F.VIIa/3m (1927-1930)
• Fairchild FC-2 (1928-1933)
• Fokker F-10A (1929-1935)
• Ford Trimotor (1929-1940)
• Fairchild 71 (1930-1940)
• Lockheed Model 10 Electra (1934-1938)
• Douglas DC-2 (1934-1941)
• Lockheed Model 9 Orion (1935-1936)
• Fairchild 91 (1936-1937)
• Douglas DC-3 (1937-1966)

Post-1939

• Boeing 307 Stratoliner (1940-1948)
• Lockheed L-049 Constellation (1946-1957)
• Lockheed L-749 Constellation (1947-1950)
• Douglas DC-4 (1947-1961)
• Curtiss-Wright C-46 Commando (1948-1956)
• Convair CV-240 (1948-1957)
• Boeing 377 Stratocruiser (1949-1961)
• Convair CV-340 (1953-1955)
• Douglas DC-6 (1953-1968)
• Douglas DC-7 (1955-1966)

Jets and Turboprops

Realistically, Pan Am did not break first ground into the jet age. The first jet to enter commercial operation was the de Havilland Comet in 1952 with the British Overseas Airways Corporation.

Although it made history, the Comet had a troubled operational service, including a two-year grounding in 1954 due to catastrophic structural failures. The first airliner to stay in sustained service was the Soviet Tupolev Tu-104, which entered service in 1956 with Soviet flagship carrier Aeroflot.

Though the Comet and the Tu-104 pioneered the jet age of airline travel, the concept of engines mounted in the wing root did not last long. Their achievements were enough for Pan Am executives to identify jets as the future of commercial aviation.

In 1955 the company placed its gamble on two competing designs. The airline ordered twenty Boeing 707 and twenty-five Douglas DC-8s before either aircraft had flown.

Pan Am became the first operator of the Boeing 707 in October 1958, and the rest, as the saying goes, is history.

• Boeing 707 (1958-1981)
• Douglas DC-8 (1960-1971)
• Boeing 720B (1963-1974)
• Boeing 727 (1965-1991)
• Boeing 747 (1970-1991)
• McDonnell Douglas DC-10 (1980-1985)
• Lockheed L-1011 Tristar (1980-1986)
• Boeing 737 (1982-1991)
• Airbus A300 (1984-1991)
• Airbus A310 (1985-1991)

After an overwhelmingly positive experience with the Airbus A300 and A310 families, Pan Am ordered 50 Airbus A320-200. The company canceled the order during its dying years. What could have been!

Legacy and What-Ifs

Most of what we consider the golden year of air travel is based on the image put forth by Pan Am during its peak in the early jet age. The Pan Am model focusing on luxurious long-haul operations is rare but still has its followers.

Over 43% of Emirates operations follow the same format Pan Am pioneered, and the same goes for 34% of Qatar Airways. These airlines make most of their earnings by bringing passengers to their hubs in Dubai and Doha before taking them to their final destinations. They are arguably the leading companies in connecting the western and eastern halves of the globe.

Could Pan Am have been saved? Maybe, but it is unlikely. The airline business is treacherous. Only two American contemporaries of Pan Am remain alive today: Delta Airlines (1925) and American Airlines (1927).

All other surviving airlines from the time worldwide enjoy the layer of government protection Pan Am lost over the years.

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Jamie Tugayeva

Jamie comes from a long line of military and civilian pilots! His brother, father, and grandfather are all pilots. Jamie's partner also works in aviation as a mechanical engineer. This means in his day-to-day, he lives and breathes all things aviation. Over the years, Jamie has gained an incredible amount of knowledge and hopes to start his PPL as soon as his degree is finished. In the meantime, Jamie passes all of his knowledge about flying, planes, and flight simulators on to the readers at Aviator Insider.

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