Why did PanAm fail?
Pan American World Airways, or PanAm, was a cultural icon of the 20th century. It was the largest international air carrier in the United States from 1927 until it went out of business in 1991, and filed for bankruptcy. Why did this once high flying airline fail?
PanAm was once a trendsetter in the airline industry
At its founding, PanAm’s area of operation was between Key West, Florida and Havana, Cuba. The airline eventually became a major company with many innovations to its credit.
These innovations included the widespread use of jet aircraft, jumbo jets, and computerized reservation systems. The computer, which was installed in 1964, occupied the entire fourth floor of PanAm’s office building.
The airline was known for its rigorous training of employees. PanAm’s flagship terminal was the Worldport at John F. Kennedy International Airport in New York City.
How did the airline that once defined success falter, then fail?
For a while, PanAm was the only company doing what it did with a technology advantage, a strong reputation for glamour and exclusive route authority. The airline enjoyed many advantages. This all changed after World War II, when competitors started competing for the same business. PanAm kept up with its competitors for quite a while.
The downturn of PanAm began with the 1973 oil crisis. Some of us remember people sitting in lines that winded down the road from gas stations where gasoline was rationed. PanAm had already spent millions trying to keep up with the competitors.
It had just purchased a fleet of Boeing 747s, assuming that the interest in passenger flight would continue to rise. Then the company was faced with skyrocketing fuel costs. The airline never did financially recover. It struggled with labor strife. PanAm attempted to stop the bleeding by selling off its Pacific routes and US domestic network.
However, the downing of PanAm 103 in a terrorist attack and the Gulf War doomed the recovery efforts. PanAm finally ceased service on December 4, 1991. It was an unfitting end to an airline that once represented the best of American aviation.
News story highlights the tragic end of a once great airline
This video, released right after the shutdown, painfully documents how PanAm fell from grace. The end was tragic, but the video is a fascinating look at the many challenges that PanAm faced.
