Pan American World Airways

Pan American Airways was incorporated on 14 March 1927 as a shell company with no aircraft, by three United States Army Air Corps officers (Henry "Hap" Arnold, Carl Spaatz and John Jouett) who were worried about something other than air travel. SCADTA, a Colombian airline with German capital and German management, had been flying since 1920 and was lobbying for landing rights in the Panama Canal Zone. To the Air Corps that looked like reconnaissance, and the answer was an American carrier in the same skies.

That spring the Post Office invited bids to carry mail from Key West to Havana. Three companies chased it: the officers' Pan American, which won the contract and had neither aeroplanes nor Cuban landing rights; Juan Trippe's Aviation Corporation of the Americas, which had the Havana rights and the money of Cornelius Vanderbilt Whitney and Averell Harriman; and a third assembled by the banker Richard Hoyt. Days before the deadline they combined. A Fairchild floatplane chartered from a Dominican operator flew the mail to Havana on 19 October 1927, and the three merged formally on 23 June 1928.

Trippe took operational control, and what followed was less an airline than a foreign policy. Through the late 1920s and early 1930s Pan Am bought failing Latin American carriers, took the mail contracts that kept them alive, and negotiated landing rights country by country, Trippe touring the continent with Charles Lindbergh in 1929 to do it. It absorbed the New York, Rio and Buenos Aires Line, took a controlling stake in Mexicana, and formed Panagra with the Grace shipping interests to work the Pacific coast of South America.

The government helped, deliberately and continuously. Washington saw a single strong American flag carrier abroad as an asset and shielded Pan Am from domestic rivals on international routes: the "chosen instrument" doctrine. It gave the airline a monopoly for two decades. It also left it, when the doctrine was abandoned after 1945, with no home network at all: the single structural weakness that would still be killing it forty years later.

The Second World War took the Clippers before the United States entered it. From 1940 Pan Am was flying military charters and ferrying aircraft to Africa under contract; after Pearl Harbor the fleet was requisitioned outright, and the airline's crews found themselves flying supply routes across the South Atlantic to Africa and the Middle East in aeroplanes painted grey.

The company also built airfields. Under contract to the US government, Pan Am's Airport Development Program laid out and equipped bases across Latin America and West Africa: the chain that later carried Allied aircraft to the Mediterranean theatre. It was an odd sort of airline work, and it left the airline with survey knowledge and ground infrastructure over half the world.

Two flights of the period became famous. In January 1943 the Dixie Clipper carried President Roosevelt to Casablanca, the first flight by a serving American president. A year earlier the Pacific Clipper, caught at Auckland by the attack on Pearl Harbor and unable to go back the way it came, had flown west instead, across Asia, Africa and the South Atlantic to New York, the first circumnavigation of the world by a commercial aircraft, completed largely without charts.

The aircraft that made Pan Am famous were boats. Land runways long enough for a loaded airliner barely existed outside North America and Europe, and a flying boat could put down in any sheltered water, so the airline's route map was drawn along coastlines and island chains. The Sikorsky S-38s and Consolidated Commodores of the Caribbean gave way in 1931 to the Sikorsky S-40, the first aircraft Trippe called a Clipper, after the sailing ships, and with the maritime vocabulary that came with the name: captains, first officers, pursers, a ship's bell.

The Pacific was the demonstration. There was no route to buy, so Pan Am built one: in March 1935 it chartered the freighter North Haven and shipped construction crews, radio equipment, fuel and hotel fittings to Midway, Wake, Guam and Manila, blasting coral out of lagoons to make harbours. On 22 November 1935 the Martin M-130 China Clipper left Alameda with mail and reached Manila on the 29th, cutting a crossing that took a fast steamship three weeks to five days of flying. Passengers followed on 21 October 1936, at $950 one way, several years of a working wage.

The Atlantic took longer, because it needed British and French agreement rather than coral. Survey flights ran through 1937 between Port Washington, Botwood in Newfoundland and Foynes in Ireland. What made a scheduled service possible was a bigger aeroplane: six Boeing 314s, delivered in early 1939, with a range that could carry passengers rather than only fuel.

On 30 March 1939 the Yankee Clipper made the first transatlantic passenger crossing. Scheduled mail followed in May on the southern route to Marseille, and on 28 June the Dixie Clipper carried the first fare-paying passengers over the same course, by way of the Azores and Lisbon. The northern route to Southampton opened three days later.

At its pre-war height this was the most glamorous transport in the world and among the least practical: a Boeing 314 carried perhaps 36 passengers sleeping in bunks, took twenty-nine hours to Lisbon, and cost what a car cost. It was also the only way to fly the ocean at all, and for four years Pan Am was the only airline that could do it.

The flying boat era ended almost the moment it was perfected. Wartime airfields left the world covered in concrete runways, and by 1946 a Douglas DC-4 could fly the Atlantic faster, cheaper and in worse weather than any boat. Pan Am's last scheduled Boeing 314 service ran in 1946; the type had lasted seven years.

Pan Am looked hard at the de Havilland Comet, the world's first jet airliner, and did not buy it. In 1955 it ordered twenty Boeing 707s instead, and twenty-five Douglas DC-8s alongside them: a combined order of $269 million placed before either aircraft had flown a passenger, and large enough to settle the shape of the industry. Boeing widened the 707's fuselage to six-abreast to match the DC-8; Trippe's order is the reason the aircraft is the width it is.

The first scheduled 707 service left New York Idlewild for Paris on 26 October 1958, Clipper America carrying 111 passengers with a refuelling stop at Gander. The 707-320 Intercontinental followed in 1959 to 60 and made the crossing non-stop in both directions. What that did to the economics was brutal and permanent: the ocean liner business ended inside a decade, and a transatlantic seat came within reach of ordinary people for the first time. Pan Am eventually flew 120 Intercontinentals, the backbone of the airline for twenty years.

Then Trippe did it again, and this time it broke him. In April 1966 Pan Am ordered twenty-five Boeing 747s for $525 million, an aircraft that did not exist, from a company that had to build a factory to make it. The order launched the programme. Pat Nixon christened Clipper Young America at Dulles on 15 January 1970, and the first commercial service left New York for London on the evening of 21 January, flown, after an engine failure on the scheduled aircraft, by Clipper Victor.

The 747 doubled the seats on every route it touched, and it arrived in the same season as the 1970 recession and, three years later, the oil crisis. Pan Am carried eleven million passengers in 1970 and lost money doing it. The aircraft that confirmed the airline's technical leadership was also the one that filled its network with capacity it could not sell, at a moment when the government was starting to license competitors onto the routes it had once protected.

Pan Am was among the first airlines to take options on Concorde, and never exercised them. It had studied the economics of supersonic flight closely enough to conclude that the aeroplane could not pay, which is exactly what happened; only two airlines ever flew it, and neither made money from it.

Its jet fleet at the end of the 1960s ran to 150 aircraft serving 86 countries on every continent except Antarctica, over a route network of 81,410 unduplicated miles. The advertising line was "The World's Most Experienced Airline", and for that decade it was simply a statement of fact.

Three things arrived within five years of each other and Pan Am survived none of them well. The 747 fleet was delivered into the 1970 recession. The 1973 oil crisis quadrupled the price of fuel for an airline flying the longest sectors in the industry. And the Airline Deregulation Act of 1978 removed the route protections that had substituted for a domestic network, leaving a carrier with the best international map in the world and no way of filling it.

The answer chosen was to buy a domestic airline. Pan Am won National Airlines in a bidding war against Frank Lorenzo's Texas International, paying a price the auction had inflated, and completed the purchase on 7 January 1980. It was a bad fit in every dimension: National's north-south routes fed the wrong gateways, the fleets shared only the 727, the two cultures did not mix, and harmonising National's pay scales upward raised costs across the combined airline. Revenues rose 62 per cent; fuel costs rose 157 per cent.

What followed was a decade of selling things. The InterContinental hotel chain went in 1981. The Pan Am Building was sold to Metropolitan Life in 1980 for what was then the highest price ever paid for a building, though the name stayed on the roof until 1992. In April 1985 the whole Pacific Division (a quarter of the route system, the Tokyo hub, and the aircraft that flew them) went to United Airlines for $750 million. Pan Am was selling the routes it had invented in order to fund the losses on the ones it had left.

Then Lockerbie. A bomb destroyed Flight 103 on 21 December 1988, killing 270 people, and the commercial effect on an airline whose brand was the transatlantic crossing was immediate and permanent: bookings fell and did not recover. The 1990 to 91 Gulf War, which emptied transatlantic aircraft across the industry, arrived while the airline was already failing. A bid for Northwest had come to nothing; a plan to sell the remaining transatlantic routes to United was overtaken by events.

Pan Am filed for Chapter 11 on 8 January 1991. Delta bought the European routes, the Frankfurt operation, the Shuttle, 45 aircraft and the Worldport for $416 million, injected $100 million and took 45 per cent of a smaller Pan Am reorganised around Miami and Latin America. That airline relaunched on 1 November 1991 with about 60 aircraft and 7,500 staff, and lost money from the first week. On 3 December Delta declined to make the next payment; the creditors' committee failed to persuade Carl Icahn's TWA to step in. Pan Am opened for business at nine the next morning and closed within the hour. The last scheduled flight, PA436, left Barbados that afternoon in Clipper Goodwill and landed at Miami: a Boeing 727, on a Caribbean sector, for an airline that had crossed the Pacific by flying boat.

The trademarks were sold at a bankruptcy auction on 2 to 3 December 1993, and the name has been used by four unrelated airlines since. The first, from 1996 to 1998, flew low-cost long-haul services from the United States to the Caribbean under the code PN. A second operated from 1998 to 2004; a third and fourth followed, each smaller, none connected to the original beyond a purchased mark.

The name also went to things that do not fly. Pan Am Railways ran freight in New England until 2022 under the globe. The Pan Am International Flight Academy, which trains airline crews, is a direct descendant of the airline's own training operation and still carries the name. And a clothing and luggage business has sold Pan Am bags, more or less continuously, to people who like the mark.

None of these is Pan American World Airways, and the encyclopedia records the airline as ending on 4 December 1991. What survived was the trademark, which is a different kind of object: an asset that can be bought, and a memory that cannot.

Pan Am's practical legacy is the shape of long-haul flying. It launched the 707 and the 747, and in doing so chose the aircraft two generations of every other airline would fly; it commissioned the 747SP to reach Tokyo non-stop; it invented the ocean-crossing route structures, the overwater navigation procedures and much of the ground infrastructure that made intercontinental service routine. The mass transatlantic market that exists today was built by an airline that no longer does.

Its institutional legacy is a warning that airline executives still cite. A carrier can hold the best routes, the best fleet, the best brand and the best service and still fail, if its cost base is wrong and its network has no foundation underneath it. Pan Am was killed by the absence of the one thing it had never been allowed to build, a domestic system, and by a decade of selling assets to cover losses, which is a way of shortening a decline rather than reversing one.

And the name has outlived all of it. The globe is on jackets, luggage and bags sold to people born after the last flight; the Worldport is gone but the Pan Am Building still stands under another name; and the 1927 airmail terminal at Key West is a restaurant that advertises itself as the birthplace of the airline. Very few dead companies remain this legible.