Formation , to
Havana, Cuba, on the first contract airmail flight operated by Pan American Airways, October 19, 1927 Pan American Airways, Incorporated (PAA) was founded as a
shell company on March 14, 1927, by
United States Army Air Corps officers
Henry "Hap" Arnold,
Carl Spaatz and John Jouett out of concern for the growing influence of the German-owned
Colombian air carrier
SCADTA, in
Central America. Operating in Colombia since 1920, SCADTA lobbied hard for landing rights in the
Panama Canal Zone, ostensibly to survey air routes for a connection to the United States, which the Air Corps viewed as a precursor to a possible German aerial threat to the canal. In the spring of 1927, the
United States Post Office requested bids on a contract to deliver mail from
Key West, Florida to
Havana, Cuba, before 19 October 1927. Arnold and Spaatz drew up the
prospectus for Pan American after they learned that SCADTA hired a company in
Delaware to obtain air mail contracts from the
US government. Also competing for the contract,
Juan Trippe formed the Aviation Corporation of the Americas (ACA) on June 2, 1927, with in startup capital and the backing of powerful and politically connected financiers including
Cornelius Vanderbilt Whitney and
W. Averell Harriman. Their operation had the all-important landing rights for
Havana, having acquired American International Airways, a small airline established in 1926 by John K. Montgomery and Richard B. Bevier as a
seaplane service from Key West to Havana. A third company, Atlantic, Gulf, and Caribbean Airways, was established on October 11, 1927, by New York City
investment banker Richard Hoyt to bid for the contract. The Postal Service awarded Pan American Airways the
US mail delivery contract to Cuba, at the end of the bidding process, but Pan American lacked aircraft and landing rights in Cuba. Just days before the 19 October deadline, the three companies decided to form a partnership. ACA chartered a
Fairchild FC-2 floatplane from a small
Dominican Republic carrier, West Indian Aerial Express, allowing Pan Am to operate the first flight to Havana on 19 October 1927. The three companies merged on June 23, 1928. Richard Hoyt was named president of the new Aviation Corporation of the Americas, but Trippe and his partners held 40% of the
equity and Whitney was made president. Trippe became operational head of Pan American Airways, the new company's principal operating subsidiary. 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 postal officials to win most of the government's
airmail contracts to the region. In September 1929 Trippe toured Latin America with
Charles Lindbergh to negotiate landing rights in a number of countries, including
Barranquilla on SCADTA's home turf of Colombia, as well as
Maracaibo and
Caracas in
Venezuela. By the end of the year, Pan Am offered flights along the west coast of South America to Peru. Following government favors for the denial of mail contracts to their competition, a forced merger was created with
New York, Rio, and Buenos Aires Line, giving a seaplane route along the east coast of South America to
Buenos Aires, Argentina, and westbound to
Santiago, Chile. Its Brazilian subsidiary
NYRBA do Brasil was later renamed as
Panair do Brasil. Pan Am also partnered with the
Grace Shipping Company in 1929 to form
Pan American-Grace Airways, better known as Panagra, to gain a foothold to destinations in South America. Pan Am's
holding company, the Aviation Corporation of the Americas, was one of the most sought after publicly listed shares on the
New York Curb Exchange in 1929, and flurries of speculation surrounded each of its new route awards. In April 1929 Trippe and his associates reached an agreement with
United Aircraft and Transport Corporation (UATC) to segregate Pan Am operations to the south of the
Mexico – United States border, in exchange for UATC taking a large shareholder stake (UATC was the parent company of what are now
Boeing,
Pratt & Whitney, and
United Airlines). The Aviation Corporation of the Americas changed its name to
Pan American Airways Corporation in 1931.
Clipper era '' service cut the time of a transpacific crossing from as much as six weeks by sea to just six days by air. Pan Am started its South American routes with
Consolidated Commodore and
Sikorsky S-38 flying boats. The
S-40, larger than the eight-passenger S-38, began flying for Pan Am in 1931. Carrying the nicknames
American Clipper,
Southern Clipper, and
Caribbean Clipper, they were the first of the series of 28
Clippers that symbolized Pan Am between 1931 and 1946. During this time, Pan Am operated Clipper services to Latin America from the
International Pan American Airport at
Dinner Key in
Miami, Florida. In 1937 Pan Am turned to Britain and France to begin seaplane service between the United States and Europe. Pan Am reached an agreement with both countries to offer service from
Norfolk, Virginia, to Europe via
Bermuda and the
Azores using the S-42s. A joint service from
Port Washington, New York, to Bermuda began in June 1937, with Pan Am using Sikorskys and
Imperial Airways using the
C class flying boat RMA
Cavalier. On July 5, 1937, survey flights across the North Atlantic began. Pan Am
Clipper III, a
Sikorsky S-42, landed at
Botwood in the
Bay of Exploits in
Newfoundland from Port Washington, via
Shediac, New Brunswick. The next day Pan Am
Clipper III left Botwood for
Foynes in
County Limerick, Ireland. The same day, a
Short Empire C-Class flying boat, the
Caledonia, left Foynes for Botwood, and landed July 6, 1937, reaching
Montreal on July 8 and New York on July 9. Trippe decided to start a service from San Francisco to
Honolulu and on to Hong Kong and
Auckland following steamship routes. After negotiating traffic rights in 1934 to land at
Pearl Harbor,
Midway Island,
Wake Island,
Guam, and
Manila, Pan Am shipped $500,000 worth of aeronautical equipment and construction crews westward in March 1935 using the S.S.
North Haven, a 15,000-ton merchant ship chartered to provision each island that the clippers would stop at on their 4- to 5-day flight. Pan Am ran its first survey flight to Honolulu in April 1935 with a Sikorsky S-42 flying boat. Construction crews, including
Bill Mullahey who would later oversee Pan Am's Pacific operations, cleared coral from lagoons, constructed hotels, and installed the radio navigation equipment necessary for the clippers to island hop from
Pearl City Seaplane Base,
Hawaii, to Asia. The airline won the contract for a San Francisco–
Canton mail route later that year and operated its first commercial flight carrying mail and express (no passengers) in a
Martin M-130 from
Alameda to Manila amid media fanfare on November 22, 1935. The five-leg, flight arrived in Manila on November 29 and returned to San Francisco on December 6, cutting the time between the two cities by the fastest scheduled steamship by over two weeks. (Both the United States and the Philippine Islands issued special stamps for the two flights.) The first passenger flight left Alameda on October 21, 1936. The fare from San Francisco to Manila or Hong Kong in 1937 was one way () and US$1,710 () round trip. "'' service between San Francisco, California, and Manila, Philippines (November 22 – December 6, 1935) s and by Imperial Airways, June 24 – July 28, 1939 in Miami, Florida, was a
hub of inter-American travel during the 1930s and 1940s. Pan Am also 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, co-owned with the
Chinese government. Pan Am flew to Singapore for the first time in 1941, starting a semi-monthly service that reduced San Francisco–Singapore travel times from 25 days to six days. Six large, long-range
Boeing 314 flying boats were delivered to Pan Am in early 1939. On March 30, 1939, the
Yankee Clipper, piloted by
Harold E. Gray, made the first-ever trans-Atlantic passenger flight. The first leg of the flight,
Baltimore to
Horta, took 17 hours and 32 minutes and covered . The second leg from Horta to Pan Am's newly built airport in Lisbon took 7 hours and 7 minutes and covered . The Boeing 314 also enabled the start of scheduled weekly contract Foreign Air Mail (F.A.M. 18) service and later passenger flights from New York (Port Washington, L.I.) to both France and Britain. The Southern route to France was inaugurated for airmail on May 20, 1939, by the
Yankee Clipper piloted by Arthur E. LaPorte flying via Horta, Azores, and Lisbon, Portugal to Marseilles. Passenger service over the route was added on June 28, 1939, by the
Dixie Clipper piloted by R.O.D. Sullivan. The Eastbound trip departed every Wednesday at Noon and arrived at Marseilles on Friday at 3 pm GCT with return service leaving Marseilles on Sunday at 8 am and arriving at Port Washington on Tuesday at 7 am. The Northern transatlantic route to Britain was inaugurated for Air Mail service on June 24, 1939, by the
Yankee Clipper piloted by Harold Gray flying via Shediac (New Brunswick), Botwood (Newfoundland), and
Foynes (Ireland) to
Southampton. Passenger service was added on the Northern route on July 8, 1939, by the
Yankee Clipper. Eastbound flights left on Saturday at 7:30 am and arrived at Southampton on Sunday at 1 pm GCT. Westbound service departed Southampton on Wednesday at Noon and arrived at Port Washington on Thursday at 3 pm. After the outbreak of World War II in Europe on September 1, 1939, the terminus became Foynes until the service ceased for the winter on October 5 while transatlantic service to
Lisbon via the Azores continued into 1941. During World War II, Pan Am flew over worldwide in support of military operations. In January 1942, the
Pacific Clipper completed the first circumnavigation of the globe by a commercial airliner by accident as the
Attack on Pearl Harbor happened. Another first occurred in January 1943, when Franklin D. Roosevelt became the first
US president to fly abroad, in the
Dixie Clipper. During this period
Star Trek creator
Gene Roddenberry was a Clipper pilot; he was aboard the
Clipper Eclipse when it crashed in Syria on June 19, 1947. While waiting at Foynes, Ireland, for a Pan Am Clipper flight to New York in 1942, passengers were served a drink today known as
Irish coffee by Chef Joe Sheridan.
Post-war expansion and modernization Clipper Great Republic at
London Airport Clipper Seven Seas at
London Airport in 1954 The growing importance of air transport in the post-war era meant that Pan Am would no longer enjoy the official patronage it had been afforded in pre-war days to prevent the emergence of any meaningful competition, both at home and abroad. Although Pan Am continued to use its political influence to lobby for protection of its position as America's primary international airline, it encountered increasing competition – first from
American Export Airlines across the
Atlantic to Europe, and subsequently from others including
TWA to Europe,
Braniff to South America,
United to Hawaii and
Northwest Orient to East Asia, as well as five potential rivals to Mexico. This changed situation resulted from the new post-war approach the
Civil Aeronautics Board (CAB) took toward the promotion of competition between major US carriers on key domestic and international scheduled routes compared with pre-war US aviation policy. ,
Trinidad in the 1950s
American Overseas Airlines (AOA) was the first airline to begin regular landplane flights across the Atlantic on October 24, 1945. In January 1946, Pan Am scheduled seven
DC-4s a week east from
LaGuardia Airport, five to London (
Hurn Airport) and two to Lisbon. The time to Hurn was 17 hours and 40 minutes, including stops, or 20 hours and 45 minutes to Lisbon. A Boeing 314 flying boat flew
LaGuardia to Lisbon once every two weeks in 29 hours and 30 minutes; flying boat flights ended shortly thereafter. TWA's transatlantic challenge—the impending introduction of its faster, pressurized
Lockheed Constellations—resulted in Pan Am ordering its own
Constellation fleet at apiece. Pan Am began transatlantic Constellation flights on January 14, 1946, beating TWA by three weeks. The Stratocruisers' double-deck fuselage with sleeping berths and a lower-deck lounge helped it compete with its rival. "Super Stratocruisers" with more fuel appeared on Pan Am's transatlantic routes in November 1954, making nonstop eastward and one-stop westward schedules more reliable. In June 1947, Pan Am started the first scheduled round-the-world airline flight. In September, the weekly DC-4 was scheduled to leave San Francisco at 22:00 Thursday as Flight 1, stopping at Honolulu,
Midway,
Wake, Guam, Manila,
Bangkok, and arriving in
Calcutta on Monday at 12:45, where it met Flight 2, a Constellation that had left New York at 23:30 Friday. The DC-4 returned to San Francisco as Flight 2; the Constellation left Calcutta at 13:30 Tuesday, stopped at
Karachi,
Istanbul, London,
Shannon,
Gander, and arrived LaGuardia Thursday at 14:55. A few months later, PA 3 took over the Manila route, while PA 1 shifted to Tokyo and Shanghai. All Pan Am round-the-world flights included at least one change of plane until
Boeing 707s took over in 1960. PA 1 became daily in 1962–63, making different en-route stops on different days of the week; in January 1963, it left San Francisco at 09:00 daily and was scheduled into New York 56 hours and 10 minutes later. Los Angeles replaced San Francisco in 1968; when Boeing 747s finished replacing 707s in 1971, all stops except
Tehran and Karachi were served daily in each direction. For a year or so in 1975–76, Pan Am finally completed the round-the-world trip, New York to New York. In January 1950, Pan American Airways Corporation officially became Pan American World Airways, Inc. (The airline had begun calling itself
Pan American World Airways in 1943.) In September 1950 Pan Am completed the purchase of
American Overseas Airlines from
American Airlines. inaugurated Pan Am's all-
tourist class
Rainbow service between New York and London on May 1, 1952, to complement the all-
first President Stratocruiser service. Pan Am introduced the
Douglas DC-7C "Seven Seas" on transatlantic routes in summer 1956. In January 1958 the DC-7C nonstop took 10 hours and 45 minutes from Idlewild to London, enabling Pan Am to hold its own against TWA's
Super Constellations and
Starliners. In 1957, Pan Am started DC-7C flights direct from the West Coast of the United States to London and Paris, with a fuel stop in Canada or Greenland. The introduction of the faster
Bristol Britannia turboprop by
British Overseas Airways Corporation (BOAC) between New York and London on December 19, 1957, ended Pan Am's competitive leadership there. It also purchased 25
Douglas DC-8, which could also seat six across; the combined order value for these first 707s and DC-8s was $269 million. Meanwhile, Boeing improved their aircraft with the introduction of the
Boeing 707-320 "Intercontinental" offering greater payload and range. Pan Am started taking deliveries of the Intercontinental in 1959–60, which together with the Douglas DC-8s arriving in March 1960, enabled non-stop transatlantic crossings with a viable
payload in both directions. Pan Am eventually operated 19 Douglas DC-8s, disposing of them in 1970 after just ten years of service. Meanwhile, Pan Am went on to operate a much larger total of 120 Boeing 707-320 "Intercontinental" aircraft, for just over 20 years, with this type becoming the mainstay of Pan Am operations until the arrival of the Boeing 747.
Widebody era ''Clipper Neptune's Car'' (N742PA) at
Zurich Airport Pan Am was a
Boeing 747 launch customer, placing a order for 25 in April 1966. On January 15, 1970
First Lady Pat Nixon christened Pan Am Boeing 747
Clipper Young America at
Washington Dulles. Pan Am's inaugural 747 service on the evening of January 21, 1970, was delayed for several hours by engine failure affecting the scheduled
Clipper Young America.
Clipper Victor was substituted for the flight from
New York John F. Kennedy to
London Heathrow (
Clipper Victor was destroyed seven years later in the
Tenerife air disaster, in a collision with a KLM 747-200). While on the tarmac at Heathrow, two students from
Aston University boarded the aircraft undetected and distributed
rag mags in the passenger accommodation as a publicity stunt. Pan Am carried 11 million passengers over in 1970, the year it introduced
widebodied airline travel. They also flew the Lockheed L-1011 Tristar and
McDonnell Douglas DC-10 Supersonic plans Pan Am was one of the first three airlines to sign options for the
Aérospatiale-BAC Concorde, but like other airlines that took out options – with the exception of BOAC and
Air France – it did not purchase the
supersonic jet. Pan Am was the first US airline to sign for the
Boeing 2707, the American
supersonic transport (SST) project, with 15 delivery positions reserved; these aircraft never saw service after
Congress voted against additional funding in 1971.
Computerized reservations, Pan Am Building and Worldport , now the
MetLife Building, was Pan Am headquarters at the
Pan Am Worldport in 1961. The terminal was once the center of the airline's New York operations. Pan Am commissioned
IBM to build PANAMAC, a large computer that booked airline and hotel reservations, which was installed in 1964. It also held large amounts of information about cities, countries, airports, aircraft, hotels, and restaurants. The computer occupied the fourth floor of the
Pan Am Building, which was the largest commercial office building in the world for some time. The airline also built
Worldport, a terminal building at John F. Kennedy Airport in New York. It was 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 aircraft under the overhang. The introduction of the
jetbridge made this feature obsolete. The Worldport building was transferred to
Delta Air Lines in 1991, and demolished by Delta and the
Port Authority in 2013. Pan Am built a gilded training building in the style of
Edward Durell Stone designed by Steward-Skinner Architects in Miami.
Peak At its peak in the late 1960s and early 1970s, Pan Am advertised under the slogan, the "World's Most Experienced Airline". It carried 6.7 million passengers in 1966, and by 1968, its 150 jets flew to 86 countries on every continent except for
Antarctica over a scheduled route network of 81,410 unduplicated miles (131,000 km). During that period, the airline was profitable, and its cash reserves totaled . and experienced crews: cabin staff were multilingual and usually college graduates, hired from around the world, frequently with nursing training. Pan Am's onboard service and cuisine, inspired by
Maxim's de Paris, were delivered "with a personal flair that has rarely been equaled."
Internal German Services (IGS) and other operations operating an Internal German Service at
Hanover Airport in May 1964. From 1950 until 1990 Pan Am operated a comprehensive network of high-frequency, short-haul scheduled services between
West Germany and
West Berlin, first with
Douglas DC-4s, then with DC-6Bs (from 1954) and
Boeing 727s (from 1966). This had come about as a result of an agreement among the United States, the United Kingdom, France, and the
Soviet Union at the end of World War II which prohibited Germany from having its own airlines and restricted the provision of commercial air services from and to
Berlin to air transport providers headquartered in these four countries. Rising
Cold War tensions between the Soviet Union and the three Western powers resulted in
unilateral Soviet withdrawal from the
quadripartite Allied Control Commission in 1948, culminating in the
division of Germany the following year. These events, together with
Soviet insistence on a very narrow interpretation of the post-war agreement on the Western powers' access rights to Berlin, meant that until the end of the Cold War air transport in West Berlin continued to be confined to the carriers of the remaining Allied Control Commission powers, with aircraft required to fly across hostile
East German territory through three wide
air corridors at a maximum altitude of . The airline's West Berlin operation consistently accounted for more than half of the city's entire commercial air traffic during that period. For years, more passengers boarded Pan Am flights at Berlin Tempelhof than at any other airport. Pan Am operated a Berlin crew base of mainly German flight attendants and American pilots to staff its IGS flights. The German National flight attendants were later taken over by
Lufthansa when it acquired Pan Am's Berlin route authorities. Over the years other local flight attendant bases outside the US included London for intra-Europe and transatlantic flying, Warsaw, Istanbul and Belgrade for intra-Europe flights, a Tel Aviv base solely staffing the daily Tel-Aviv–Paris–Tel-Aviv service, a Nairobi base solely staffing the Nairobi–Frankfurt–Nairobi service and Delhi and Bombay bases for India–Frankfurt flights. Pan Am also operated
Rest and Recreation (R&R) flights during the
Vietnam War. These flights carried American service personnel for R&R leaves in Hong Kong, Tokyo, and other Asian cities.
Passenger traffic (1951–1989) In August 1953 PAA scheduled passenger flights to 106 airports; in May 1968 to 122 airports; in November 1978 to 65 airports (plus a few freight-only airports); in November 1985 to 98 airports; in November 1991 to 46 airports (plus 14 more with only "Pan Am Express" prop flights).
Downturn Clipper Star of the Union (N744PA) at
John F. Kennedy Airport in May 1973
Fallout from 1973 oil crisis Pan Am had invested in a large fleet of Boeing 747s, expecting that air travel would continue to increase. It did not, as the introduction of many wide-bodies by Pan Am and its competitors coincided with an economic slowdown. Reduced air travel after the
1973 oil crisis made the overcapacity problem worse. Pan Am was vulnerable, with its high
overheads as a result of a large decentralized infrastructure. High fuel prices and its many older, less fuel-efficient
narrow-bodied airplanes increased the airline's operating costs. Federal route awards to other airlines, such as the
Transpacific Route Case, further reduced the number of passengers Pan Am carried and its profit margins. By 1976, Pan Am had racked up of accumulated losses over a 10-year period, and its debts approached . This threatened the airline with bankruptcy. Former
American Airlines vice president of operations
William T. Seawell, who had replaced Najeeb Halaby as Pan Am president in 1972, began implementing a
turnaround strategy: trimming the network by 25%, slashing the 40,000-strong workforce by 30%, cutting wages, introducing stringent economies and rescheduling debt, and reducing the size of the fleet. These measures, aided by the use of
tax-loss credits, enabled Pan Am to avert financial collapse and return to profitability in 1977. Although revenues increased by 62% from 1979 to 1980, fuel costs from the merger increased by 157% during a weak economic climate. Further "miscellaneous expenses" increased by 74%. '' (N70724) at
Zurich in 1985
Disposal of non-core assets and operational cutbacks As 1980 progressed and the airline's financial situation worsened, Seawell began selling Pan Am's non-core assets. The first asset to be sold off was the airline's 50% interest in Falcon Jet Corporation in August. Later in November, Pan Am sold the Pan Am Building to the
Metropolitan Life Insurance Company for . In September 1981, Pan Am sold off its
InterContinental hotel chain. Before this transaction closed, Seawell was replaced by
C. Edward Acker,
Air Florida's founder and ex-president, as well as a former
Braniff International executive. The combined sale value of the InterContinental chain and the Falcon Jet Corp. stake was . Acker followed up the asset disposal program he had inherited from his predecessor with operational cutbacks. Most prominent among these was the discontinuation of the round-the world service from October 31, 1982, when Pan Am ceased flying between
Delhi, Bangkok and Hong Kong due to the sector's unprofitability. To provide additional seating capacity for its 1983 spring/summer season, the airline also acquired three passenger
Boeing 747-200Bs from
Flying Tigers, who took four of Pan Am's
747-100 freighters in return.
Fleet restructuring Despite Pan Am's precarious financial situation, in the summer of 1984, Acker went ahead with an order for new Airbus models in wide-body and narrow-bodied aircraft, becoming the second American company to order Airbus aircraft, after Eastern Air Lines. These advanced aircraft, economically and operationally superior to the 747s and 727s Pan Am operated at the time, were intended to make the airline more competitive. In 1985, new A310-221s began replacing 727s on the Internal German Services (IGS) and A300s flew in the Caribbean networks later that year. From early 1986, additional new longer range A310-222s replaced some of the 747s on the slimmed-down transatlantic network following
ETOPS certification (approval by the
Federal Aviation Administration (FAA) of transoceanic flying with twin-engined aircraft). The first A310 ETOPS transatlantic route was
New York-JFK to
Hamburg,
Detroit to
London followed shortly after that. Pan Am's decision not to take delivery of the A320s and to sell its delivery positions to Braniff meant that the majority of its short-haul US domestic and European feeder routes, and most of its IGS services, continued to be flown with obsolete 727s until the airline's demise. This put Pan Am at a disadvantage against rivals operating state-of-the-art aircraft with greater passenger appeal. The acquisition of
Pennsylvania-based
commuter airline
Ransome Airlines for (which was finalized in 1987) was meant to address the issue of providing additional feed for Pan Am's mainline services at its hubs in New York, Los Angeles and Miami in the United States, and Berlin in Germany. The renamed
Pan Am Express operated routes mostly from New York, as well as Berlin, Germany. Miami services were added in 1990. However, the regional Pan Am Express operation provided only an incremental feed to Pan Am's international route system, which was now focused on the Atlantic Division.
US east coast shuttle In an attempt to gain a presence on the busy
Washington–New York–Boston commuter air corridor, the
Ransome acquisition was accompanied by the $100 million purchase of
New York Air's shuttle service between Boston, New York, and Washington, D.C. This parallel move was intended to enable Pan Am to provide a high-frequency service for high-
yield business travelers in direct competition with the long-established, successful
Eastern Air Lines Shuttle operation. The renamed
Pan Am Shuttle began operating out of LaGuardia Airport's refurbished historic
Marine Air Terminal in October 1986. However, it did not address the pressing issue of Pan Am's continuing lack of a strong domestic feeder network.
Thomas G. Plaskett, a former American Airlines and
Continental executive, replaced Acker as president in January 1988 (joining Pan Am from the latter). Faced with a $300 million lawsuit filed by more than 100 families of the victims, the airline
subpoenaed records of six US government agencies, including the
CIA, the
Drug Enforcement Administration, and the
State Department. Though the records suggested that the US government was aware of warnings of a bombing and failed to pass the information to the airline, the families claimed Pan Am was attempting to shift the blame. Also, in December 1988 the FAA fined Pan Am for 19 security failures, out of the 236 that were detected amongst 29 airlines.
Failed bid for Northwest Airlines In June 1989, Plaskett presented
Northwest Airlines with a $2.7 billion takeover bid that was backed by
Bankers Trust,
Morgan Guaranty Trust,
Citicorp and
Prudential-Bache. The proposed merger was Pan Am's final attempt to create a strong domestic network to provide sufficient feed for the two remaining mainline hubs at
New York JFK and Miami. It was also intended to help the airline regain its status as a global airline by re-establishing a sizable transpacific presence. The merger was expected to result in annual savings of $240 million. However, billionaire financier
Al Checchi outbid Pan Am by presenting Northwest's directors with a superior proposal.
Fallout from 1990–91 Persian Gulf War The
first Gulf War triggered by the Iraqi
invasion of Kuwait on August 2, 1990, caused fuel prices to rise, which severely depressed global economic activity. This in turn caused a sharp contraction of worldwide air travel demand, plunging once profitable operations, including Pan Am's prime transatlantic routes, into steep losses. These unforeseen events constituted a further major blow to Pan Am, which was still reeling from the 1988
Lockerbie disaster. To shore up its finances, Pan Am sold most of its routes serving London Heathrow – arguably Pan Am's most important international destination – to United Airlines with two Boeing 747s. This left Pan Am with only two daily London flights, serving Detroit and Miami, which both used
Gatwick as their London terminal from the start of the 1990/91 winter timetable. Further asset disposals included Pan Am's sale of its IGS routes to Berlin to
Lufthansa for , which became effective at the same time and brought the total value of asset disposals to . These measures were accompanied by the elimination of 2,500 jobs (8.6% of its workforce). These cutbacks were announced by the airline in September 1990.
Bankruptcy Pan Am was forced to file for
bankruptcy protection on January 8, 1991.
Delta Air Lines purchased the remaining profitable assets of Pan Am, including its remaining European routes (except one from Miami to Paris), and
Frankfurt mini hub, the
Shuttle operation, 45 jets, and the
Pan Am Worldport at John F. Kennedy Airport, for $416 million. Delta also injected $100 million becoming a 45 percent owner of a reorganized but smaller Pan Am serving the Caribbean, Central and South America from a main
hub in Miami. The airline's creditors would hold the other 55 percent. The Boston–New York LaGuardia–
Washington National Pan Am Shuttle service was taken over by
Delta in September 1991. Two months later Delta assumed all of Pan Am's remaining transatlantic traffic rights, except Miami to Paris and London. In October 1991, former
Douglas Aircraft executive Russell Ray Jr., was hired as Pan Am's new president and CEO. As part of this restructuring, Pan Am relocated its headquarters from the Pan Am Building in New York City to new offices in the Miami area in preparation for the airline's relaunch from both Miami and New York on November 1. The new airline would have operated approximately 60 aircraft and generated about $1.2 billion in annual revenues with 7,500 employees. Following the relaunch, Pan Am continued to sustain heavy losses. Revenue throughout October and November 1991 fell short of what had been anticipated in the reorganization plan, with Delta claiming that Pan Am was losing $3 million a day. This undermined Delta's,
Wall Street's and the traveling public's confidence in the viability of the reorganized Pan Am. following a decision by Delta CEO Ron Allen and other senior executives not to go ahead with the final $25 million payment Pan Am was scheduled to receive the weekend after
Thanksgiving. As a result, some 7,500 Pan Am employees lost their jobs, thousands of whom had worked in the New York City area and were preparing to move to the Miami area to work at Pan Am's new headquarters near
Miami International Airport. Economists predicted that 9,000 jobs in the Miami area, including jobs at companies not connected to Pan Am that were dependent on the airline's presence, would be lost after it folded. Delta was sued for more than $2.5 billion on December 9, 1991, by the Pan Am Creditors Committee. Shortly thereafter, a large group of former Pan Am employees sued Delta. Pan Am was the third American major airline to shut down in 1991, after
Eastern Air Lines and
Midway Airlines. Pan Am's last remaining hub (at Miami International Airport) was split during the following years between United Airlines and American Airlines. TWA's Carl Icahn purchased Pan Am Express at a court ordered bankruptcy auction for $13 million, renaming it Trans World Express. The Pan Am brand was sold to Charles Cobb, CEO of Cobb Partners and former
United States Ambassador to the
Republic of Iceland under
President George H. W. Bush and Under Secretary of the
US Department of Commerce under
President Reagan. Cobb, along with Hanna-Frost partners invested in a
new Pan American World Airways headed by veteran airline executive Martin R. Shugrue Jr, a former Pan Am executive with 20 years of experience at the original carrier. In his book,
Pan Am: An Aviation Legend,
Barnaby Conrad III contends that the collapse of the original Pan Am was a combination of corporate mismanagement, government indifference to protecting its prime international carrier, and flawed regulatory policy. He cites an observation made by former Pan Am Vice President for External Affairs, Stanley Gewirtz: Under the terms of bankruptcy, the airline's International Flight Academy in Miami was permitted to remain open. It was established as an independent training organization beginning in 1992 under its current name,
Pan Am International Flight Academy. The company began operating by using the
flight simulation and
type rating training center of the defunct Pan Am. In 2006, American Capital Strategies invested $58 million into the academy. Owned by the parent of Japanese airline
All Nippon Airways as of October 2014, Pan Am International Flight Academy is the only surviving division of Pan American World Airways. ==Reuse of name==