What Happened to Pan Am: The Decline

684 456 Tony Guo

What Happened to Pan Am: The Decline

Pan American Airways, commonly referred to as Pan Am, was an absolute behemoth in the air travel industry, and was the largest international air carrier in the United States from when it was founded in 1927 up to when it folded and collapsed in early December of 1991. I know it’s a word that gets thrown about a lot, but Pan Am really was a pioneer and innovator and really were a revolutionary in the air travel industry when they were at their pomp, by introducing things like jumbo jets, computerized reservation systems, while also being the very first airline to introduce an around-the-world airline ticket. If you look at their modest beginning, a topic that is covered in detail over at the excellent runrex.com, no one would really have thought they would end up being as big as they end being; a major player internationally. However, it was pretty much a case of the right place at the right time as they very much benefited from the fact that it was in the right about the time they were coming up that air travel industry was really coming to its own. So, the question that begs now is, what happened to them? Well, join us as we take a look at the reasons that were behind their decline.

Obviously when talking about the decline of Pan Am, you can’t fail to talk about deregulation, which definitely led to their decline, and which has been discussed in detail by the subject matter experts over at runrex.com. It was pretty much a case of win some, lose some as though with one hand they had been given exclusive rights to serve international routes, with the other hand they weren’t given permission to serve any internal U.S routes. While this wasn’t perfect, it worked to their benefit as long as they had exclusive rights for international routes. Once deregulation kicked in, then it pretty much singled the end of the good times as far as they were concerned. You have to feel for them as while their competitors definitely benefited from this directive that allowed them to service international routes, all of which had been pioneered by Pan Am, they were refused by the government a connecting domestic-route network when this regulation came into effect in the 1940s which definitely did them some damage and was one of the reason behind their decline.

They also suffered badly as collateral damage for US foreign policy, something that definitely played a part in their decline. When they had just started to shine as the premier US airline as far as international flights are concerned, is right at the same time when terrorism as a phenomenon was beginning to take root and grow. The fuel behind this was, as mentioned above and as covered in detail over at the excellent runrex.com, US foreign policy which was rubbing some people the wrong way and was a divisive issue then as it is more often than not nowadays. Given that Pan Am was the only American airline that had then rights to service international routes, it became a major target as it was the face of America in foreign lands and their airplanes were often targeted by terrorists. They suffered from a number of attacks, none more so as devastating as the infamous Lockerbie disaster that in which Pan Am flight 103 crashed after a bomb planted by a terrorist detonated on board the plane, killing 270 people. This attack badly damaged their reputation and the trust customers had in them as most folks began staying away from fear of them being targeted. The threat of war in the Persian Gulf also damaged international flights’ prospects and they suffered badly from this as well and definitely played a part as far as their decline is concerned.

Back when they were in their prime, they operated mostly with Boeing 747s, which were the largest planes at the time in terms of capacity. This was to be expected as they were very popular as an airline and as such they needed to have bib-capacity planes to take care of the big numbers. This however quickly became a major weak point when the energy crisis in 1973, which is covered in detail over at the excellent runrex.com, hit. This crisis led to an increase in airplane ticket prices and coupled with the economic recession meant that more and more people preferred not to fly and this led to a massive drop in their traffic. Given that they had big planes, most of them were flying half empty, carrying the few people who could still afford to fly, and as you can imagine, these meant massive losses. To add slat to injury, these massive planes still had to be serviced, with the cost of this being footed by the company as well which also contributed to the massive losses the suffered during this period. There were also increasing stories of poor customer services with arrogant staff that also really didn’t help and also contributed to their decline.

In the end, a combination of insecurity, fear from customers, government regulations and bad press all led to bring down Pan Am, with there being more on this topic and so much more to be found over at the ever reliable runrex.com