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Biggest Mistakes For An Airline

Thu Jun 15, 2000 7:33 am

What were some big blunders that airlines made. I can think of a few, but I know there are more. I can particularly think of PeoplExpress's huge blunders. One being the purchase of a failing Frontier, and another being the purchase of Britt Airways. Britt airways had a huge feed into O'Hare, but PeoplExpress had very little presence there. Can anyone else sugguest think of any.
travelin man
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 8:31 am

I'd have to say that American Airlines' attempt at "simplified pricing" (early/mid- '90s?) pretty much blew up in its face when the competitors immediately undercut American and threw the industry into a price war. It was pretty much a disaster.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 8:43 am

A big one that I know of was Canadian Airlines purchase of Wardair back in the late 80's. At the time Wardair was strong competition for the major Canadian airlines because of it's great service, but their business plan was not very stable,and by the end of the 80's they were almost finsihed. Apperantly their was an Air Canada person on the inside of CP's management who was leaking information that Air Canada was going to buy out Wardair....CP could not let that heppen because Wardair's routes were very lucrative, and they had a simmilar fleet. So CP went ahead and paid, double or tripple per share for Wardair. This was a very bad move for CP, air canada had no plan to take over Wardair, and because their dept was just too much for them to handle.

Anothr mistake that I personaly think was a very bad move was Air Canada's decision to purchase the A320. It was unfortunate the the people who ran Air Canada within the government took the kick backs and went with the airbus planes......with this came the purchase of the A340 with Air Canada pilots were all strongly against. AC's decision for going with the bigger busses was that they could then cross train the crews and save a lot of money, unfortunatly this never happened, and in the end it worked out to cots Air Canada more to train more pilots on the A330/340 from the 767/747's...

just a thought...
"Clive Beddoe says he favours competition, but his actions do not support that idea." Robert Milton - CEO Air Canada
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 9:27 am

I don't think PeoplExpress bought Frontier. I think
it was Continental, under Lorenzo, before acquiring
Frontier, but I could be wrong.

Biggest airline blunders? Well, US Air buying PSA,
Pan Am and TWA selling their Heathrow routes,
TWA's mini-hub in Atlanta, Continental Lite,
British Airways adopting that awful livery, Delta
spending so much money on poor liveries,
PeoplExpress expanding too quickly, Tower Air
flying old planes requiring a lot of maintenance,
American Airlines' reluctance to buy Pan Am's
Pacific routes, Pan Am selling those routes,
Delta's Salt Lake City hub.....

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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 9:58 am

Pan Am cutting back on security in the mid 1980s which resulted in the bombing of flight 103 (my best friend was killed on the flight ;-( ) Pan Am bought dogs from the local kennal and said that they were bomb sniffing dogs when they weren't; as well as getting a waiver from the FAA to skip hand searches in luggages and their bomb equipment was on the blink which was unable to pick up plastic explosives in the color mode but was able to pick up grenades, knives and guns in black and white mode. The management was to blame as they flew Pan Am into the ground and not doing enough to help the victim's families as they needed info on loved ones on the flight. TWA for being ruled under Carl Ichan and selling the JFK-LHR route to AA. Tower for buying old 747s that should've been scrapped or in a museum long ago. Northwest for pissing too many people off and being called Northworst. BA staff for their racist attitude toward me and my family a few years back and British Airways management 4 not replying to my complaints.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 10:06 am

TWA selling their LHR slots to American.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 10:23 am

I think Pan Am going into a bidding war with Eastern over National in 1980 and having to pay too much for National when they in turn shut down most of National's old routes.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 10:32 am

CanJet's hub in YYZ (if there going to have one there, they said they will though). There is too much competition with AC in YYZ, CanJet won't do well there. It's a good thing they got a hub in Halifax though, almost no competition with AC there at all.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 10:35 am

The biggest mistake that any airline can make is to have it's management managed by people who are not from airlines.

There are all sorts of examples of airlines that are no longer here because their management was taken over by people who could care less if they where running an airline or a department store.

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Thu Jun 15, 2000 11:06 am

First, PeoplExpress did buy FL, and operate it as a subsidiary; ran 'em into the ground muy pronto. The original Frontier had some darned good service.

Of course, after FL was sacrificed by PE, CO's acquisition included hiring many FL people with seniority, even though there was no obligation to so do.

BN? They should have filed Chpt 11 while still possessing enough cash to resume operations. maybe we'd have a little competition at DFW.

And maybe the biggest comeback-blunder? BN II should have moved its HQ to Kansas City rather than Florida; MCO could have developed into a choice hub, great underutilized facility, centrally located, city gov't that would have bent over backwards to help, and a bunch of locals who don't even know how to be rude. It culda worked.
...three miles from BRONS, clear for the ILS one five approach...
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Thu Jun 15, 2000 11:06 am

Yes, PeoplExpress bought Frontier in its dying days. PeoplExpress bought Frontier, then Continental bought PeoplExpress, and a whole bunch of other people like New York Air, and Texas International, but I'm sure you know that ContinentalEWR.
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Thu Jun 15, 2000 12:11 pm

Why was Delta's hub at Salt Lake City a mistake? It gave them a strong western operation when they bought out Western, and it seems to be a money-maker (although I've never personally been there to see it). Plus they fly MD-90s in and out of there. It seems to me that Delta buying Western and acquiring their Salt Lake City hub is something like United buying US Airways.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 2:21 pm

I have one major blunder for you...American Airlines. The name says it all. American is a wannabe United. They are almost like the obsessive fan of a rock star. God forbid if United should do something that might make American look small. I got news for you are and always will be smaller than United...Get over it.
Aviation is proof that, given the will, we have the capacity to achieve the impossible.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 2:33 pm

I too would like to know why Delta's hub at SLC could be deemed a "mistake."


RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 2:34 pm


Your a complete idiot.

Who the hell cares who AA wants to be. What it wants to be is a profitable carrier with as large a market share as possible. If that means competing with UA, so be it.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 2:35 pm

I think that start-up airlines make a huge mistake when they go into a city dominated by a large carrier. What was that sound I heard on a previous topic?  
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 3:12 pm

The Great Canadian Airline Blunder No. 1

As Slawko said earlier, Canadian did indeed screw up by taking over Wardair and assuming its debt. But, not only did CP try foolishly to take Wardair's debt as its own(something that would really come back to haunt it), CP cut short its orders for A320s and kept those aging DC-10s, 737s and F28s, resulting in a pretty old average fleet age and higher maintenance costs. The debt was too much - it ballooned to nearly $4 billion CDN. So CP's restructuring efforts came too little and too late. Believe it or not, even the napkins and silverware had been set up as CP's collateral!

The Great Canadian Airline Blunder No. 2

Greyhound Air, one of those discount carriers was scrapped by Laidlaw, the same company that owns Greyhound Canada after operating for only a year. And business was brisk. Why? Because Laidlaw's shareholders didn't want to be in the airline business! So Laidlaw canceled Kelowna Flightcraft's contract to service the 727s, and hundreds of passengers got stranded. This meant that a discount airline got shot down by a few filthy rich investors who didn't have to worry about AC and CP's high fares at the expense of so many passengers who otherwise cannot afford to fly! The very least that Laidlaw could've done was to sell Greyhound Air to another capable owner. Period. Fortunately, there already was a new and aggressive Calgary-based discount carrier with an expanding 737 fleet in green, black and white colors...
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 9:56 pm


You hit the nail on the head. Pan Am was killed by incompetent management, idiots who didn't know their @ss from a hole in the ground, and it showed. It proved impossible to find a successor to the wily Juan Trippe, but what really destroyed the airline was a complete lack of understanding of how the airline business works.

Ed Acker sent Pan Am into its grave by buying National in '82. Spent over a billion dollars trying to integrate two completely different airline cultures, not to mention route structures in an ill-conceived attempt to start up a domestic route network. It would have cost less for PA to do it on its own. That one move sent an already-ailing Pan Am to its deathbed. 103 was the ultimate end.

I know that it probably comes really late, but I'm personally very sorry for your loss...103 was a terrible tragedy that should have never happened, and should have been prevented. It was, and still is, completely inexcusable that it wasn't.

All that can be done now is bringing these thug terrorists to justice. I hope they hang.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 11:13 pm

I beg to differ that the ex-Western hub SLC is giving Delta a strong west coast presence - they are really playing at least second fiddle to United, and to Alaska and Southwest to an extent.

I personally hate the SLC facility and try to avoid it. Don't get me wrong, I love Delta, but when I fly to PDX (I often go there), I'll go out of my way to fly through CVG or ATL and not SLC.
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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 11:22 pm

I heard (on this forum among other places) that high taxes and
operating costs are a problem for Delta at SLC. Also, the SLC
does not really give Delta that big a presence in the West. Although
it is not spotty, it is not strong either.

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RE: Biggest Mistakes For An Airline

Thu Jun 15, 2000 11:33 pm

Samurai777, I agree, shutting down Greyhound was a mistake, for exactly the reasons you stated. The company succeeded, management failed!

Canadi>n's great mistake was overleveraging itself. Whether it was Wardair, or whatever, CP took on too much debt, pure and simple. After that, a bit of a downturn sealed their fate. Fleet management was another mistake CP made. Why did they sell off those fairly efficient A310's and keep bigger gas-guzzling DC-10's? Sure, they needed the 10's on the pacific, but why didn't they dump them on the atlantic routes? Big mistake. Same thing with getting rid of the 733's and keeping 732's. And they goofed around with their fleet for a lot of years. CPAir bought 747's, 727's back in the 70's. Then sold the 727's. Then bought some more 727's. Then sold the 727's. Then ordered 767's. Then cancelled the 767's trading those for 733's. Then repainted 733's 3X before dumping them. Then dumped 747's. Then merged with PWA, and dumped their 767's. Then bought 763's and A320's. Then bought Wardair for it's fleet. Then bought 744's. Then dumped Wardair's fleet. Then found they couldn't afford more 320 deliveries and deferred them for years... you get the picture... retraining and changing spares stocks cost them a fortune...

Slawko, I really disagree about AC's 320's being a mistake. Look at what they had to choose from 10 years ago, where would they be with 737classics or MD-80's? Anyways, in all departments the 320's were better for AC's routes and operations.
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Seattle Ops

Thu Jun 15, 2000 11:57 pm

Oh boy, here we go again Seattle Ops. Explain to me why it was such a blunder to go into an airline's hub if you are a start up. If that were true. Explain to me how that's a blunder and why airlines like Valujet, Morris Air, AirTran, Frontier, and JetBlue don't fail right away or weren't successful. I agree that it is far more risky than starting at Hometown USA, but still why didn't these airlines fail like you said SeattleOps.

RE: Biggest Mistakes For An Airline

Fri Jun 16, 2000 1:38 am

I agree, far from an airline blunder, when low-fare airlines start in large hub fortresses, its really smart strategic, long-term planning. History paints a vivid picture:

Air South (Columbia, SC)
AccessAir (Des Moine, IO)
Eastwind (Greensboro, NC)
Western Pacific (Colorado Springs, CO)
WinnAir (Long Beach, CA)


Frontier (Denver, CO)
Airtran (Atlanta, GA)
JetBlue (New York, NY)
National (Las Vegas, NV)
SunCountry (actually, a little too early to tell)

As you can see, when small airlines with low cost structures go into large hub fortresses, they have already a large population, some times frustrated with a monopoly airlines lack of 1) low fares 2) good service. Most present major hub markets can support two airlines. Many are now getting them. Weather it be two large ones like DFW, LAX, and ORD or one large one and one small one like ATL, DEN, LAS, two airlines even out competition and give consumers a choice. Population really has a lot to do with it. Of course there have been a few airlines at great airports that haven't survived, Kiwi, Tower, that was mostly due to lack of planning and mismanagement. So on the contrary, I think you will see in the future, most new airlines charging the forts, and setting up shop next to the big guy, providing simplified fare structure, equal frequencies, and standard service.
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RE: Biggest Mistakes For An Airline

Fri Jun 16, 2000 2:22 am

Don't forget this about WestPac from the earlier post:

When WestPac ops were in COS, for the first couple of years, things were going very well. It's when they decided to massively expand, and ultimately move the operation to Denver (much higher cost and much more competition) that it nose-dived.

WestPac in the early days (under Ed Beauvois, founder of AWA, too) was a big success. But look what they did right at the end:

1. Started playing with fleet types -- They had some real old 727s flying alongside their 737 fleet

2. Started a regional express carrier -- MAX: Mountain Air Express. Ultimately they cancelled mountain service and used the props for Oklahoma City and Wichita service

3. Really screwed around with their hubs -- for a while, they operated dual hubs with significant ops in Denver and in Colorado Springs, which was ridiculous. Then they concentrated solely on Denver.

4. Negotiated a merger with another airline (Frontier) which was already struggling in Denver. The only reason that they didn't pull Frontier down with them is that Frontier had the good sense to drop the merger. Sam Addoms (CEO of Frontier) is one hell of a manager. He's grown that line into something to be proud of.

5. Completely revamped their schedule to all stations - customers in cities like LAX, SFO etc., who were used to WestPac flights to COS (or DEN) had to adjust, and many times, they adjusted right over to United.

6. Sacked management multiple times, leaving a carrier with no consistent leadership

If you look at it, this is what WestPac convinced itself was a good idea:

"Let's take our little airline and it's commuter partner, move from the little airport which we basically own to a big airport with one huge tenant in it. Let's put our airline in front of United and tell it politely to stop. Let's put MAX in front of United Express/Air Wisconsin/Great Lakes and smile. Then we'll have money."

When the acid trip wore off, the line was dead... too bad, too- they were a lot of fun to fly, had great service, and were fun to spot with their flying billboards!!

(Point of interest -- my mother was in the air on the last revenue flight from EWR-DEN (ultimately to PDX via connection) on WestPac the day they announced they were ceasing operations. The F/As informed them that all operations were stopped and that Denver was their final destination, regardless of where they were going. They passed out every morsel of food, every can of soda, and everything else. When they landed, half the staff was gone, the F/As had to help find out what bag claim was there, and they were already covering the WestPac signs at the ticketing counter. She ended up going United DEN-PDX 3 days later.)
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Thank You N202PA

Fri Jun 16, 2000 2:28 am

Thank you for your cndolensce. I really loved Pan Am along with my family but we had all known that Ed Acker would fly a great airlines into the grave. I still love it to this day but only when it was in the Trippe era when he had run it. But when Ed Acker took over and messed up I swore I had heard the great Juan T Trippe turning over in his grave as Acker was cutting down on security and had endangered those on PAN AM 103. It was bad enough that Pan Am lost a 747-100 along with alot of people that had died in the 70s in the worst plane crash the world ever saw. But just when the airline thought that things would be better Juan T Trippe dies and Acker takes over and screws things up. other problems than PA 103 occured flight staff weren't as friendly as they used to be and other wemployees didin't care as much any more. So as you can see when Acker took over it spelled a great disaster for the airline. I'm glad PA is back and flying 727 aircraft as well as flying quite a few Jetstream 31s and i do look forward when the airline makes it back to international status. I sure do miss the PA 747s that fly JFK-LHR.
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RE: Thank You N202PA

Fri Jun 16, 2000 3:07 am

I believe Plaskett was at the helm on Dec. 21, 1988, but it was Acker's monumental blunder with National that sent Pan Am into its final nosedive.

The problem was this: National people hated Pan Am people and Pan Am people hated National people. National's sun globes thought that PA people were a bunch of stuffed shirts who took their jobs way too seriously. PA's sky globes thought that PA meant something to the wasn't just another airline, but a legacy and a leader in the field of aviation. Thus, they thought that National's sun globes weren't taking things seriously enough. It was a complete clash of cultures, and it doomed the merger from the very beginning.

Also, and much more importantly, was the integration of the pilots. PA pilots, who had been trained in the golden era, who had suffered the abuse of their Clipper era senior captains, all in the hopes of flying with what they thought was *the* best airline in the world, were damned if *they* were going to give up their seniority at Captain slots to some backwater hicks from Florida. Similarly, you had guys with National who would ordinarily have been 727 and DC-10 captains if not for the merger, which would drop them to the bottom of the seniority list. This created a *lot* of ill will on the flight deck, and Acker should have seen it coming. It created two entirely seperate cultures at Pan Am, and when National's pilots essentially won at arbitration, it pulled the airline apart.

Then National's routes fell through. PA was flying the National DC-10s, plus the L-1011s and 747s they had ordered in the 70s. No fleet commonality whatsoever. The 727s worked, but for what? PA spent a billion dollars on a route system that ultimately failed, and should never have been acquired in the first place. Acker killed Pan Am and ran.

Trippe was really out of the picture, though, in the early 70s. He had some influence in the company as the decade wore on, but he became more and more feeble, and finally passed. Basically, the debt that PA incurred with the 747 purchases could have been overcome at that time, if it weren't for a decade of mismanagement by Najeeb Halaby et al. They were incompetent, and got PA into a bad situation, but they weren't what killed Pan Am. Acker was.

Two decades of this nonsense cause horrible financial woes, bringing about the sale of the Pacific route structure to United in 1985. They *had* to do something to stop the financial bleeding. There weren't any more assets left to sell. PA had sold the Pan Am Building in Manhattan--the home that they *built*--in the early '80s. They sold the lucrative Intercontinental Hotel chain. But it didn't help.

And then they started cutting back on security. Maintenance slacked off. The culture at the airline took a major turn for the worse. Everyone was pointing fingers, and no one trusted anyone but their friends at the company. And everyone hated management, making it hard for any directives to get accomplished. By 1991, everyone was bitter, depressed, disappointed, and still reeling from 103. It was a decade-long self-destruction, and it came to a merciful end in December, 1991.

It's really sad what happened to Pan Am in the 80s. Somehow, I could tell things were not quite right back then, but I didn't know what. My mom was always angry and quietly cursing the name of Ed Acker...and then Tom I know why. They destroyed a legend.

And in a way, it's sad to see what PA's become--the proud blue globe flying discount fare routes like a common AirTran or Kiwi.

But at least they're pioneers again. The airline is back in the air, unlike other greats like Braniff and Eastern. They're trying a strategy that no one's tried before--low fares, high frills from regional airports, bringing convenience and class to an industry that's almost totally bereft of any sort of decency these days. The only airline I can think of that comes close to what they're doing is MidEx, and I've heard that service has slacked off lately with them.

Maybe Pan Am will get international routes back, and maybe they won't--I certainly hope they do. But if they can just gain a foothold and bring a new concept of travel to the airline consumer...then maybe it's not such a bad way to live on after all. Consider it a well-deserved retirement for nearly 65 years of service.
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RE: Biggest Mistakes For An Airline

Fri Jun 16, 2000 3:23 am

I agree with you Flashmeister. That whole messiah management sunk the airline because there was no stability and too many ideas. The whole Denver thing was very dumb. I think part of the problem was that WestPac had no patience. Sure there were smaller load factors at COS, but they paid the bills.
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RE: Biggest Mistakes For An Airline

Fri Jun 16, 2000 3:09 pm

Perhaps the greatest comedy of errors on this side of the world was that concerning Carib Express. In 1994 a consortium of businessmen in association with British Airways and the Governments of Grenada, St. Vincent and the Grenadines, St. Lucia, Barbados and Dominica got together to form a new regional airline, originally called "Project Sunshine". The impetus for it came from the Governments' dissatisfaction with the service provided by the long-existing regional airline LIAT (of which all 5 Governments were shareholders!) and their perception that this dissatisfaction also existed among travellers. Certainly LIAT had had a reputation for late flights and lost luggage (hence the nicknames "Leaving Island Any Time" and "Luggage In Another Territory") but, rather than try to sort out its problems, the islands jumped at BA's grand idea to the dismay of Antigua and Barbuda, in which LIAT is based and Trinidad and Tobago, joint largest shareholders with 15% (Barbados also held 15% at the time).

Carib Express (IM) was launched in April 1995 and started operations from its BGI hub to GND, SVD, SLU and DOM using BAe 146-100s - 3 of them. It then rapidly expanded its network to POS, TAB, ANU, CCS and GEO. For a while things seemed well but rumours circulated about the airline being in considerable financial difficulty. By late 1995 IM had grounded one of its jets (then subleased it to a European operator), dropped one of its shareholder destinations (DOM, along with TAB and ANU) and was laying off many of its staff. By January 1996 IM was searching desperately for a turboprop aircraft to serve the inter-island routes and had cut back service to one daily POS-BGI flight with links to SVD, GND and SLU with a weekly GEO flight. It tried unsuccessfully to get onto the lucrative POS-CCS route in February 1996. By June 1996 IM was gone from the sky, its only -146 grounded and it was reduced to providing ground handling services at BGI (which it still does).

Why did IM fail? The reasons are many. First, IM overestimated and poorly judged the Caribbean marketplace. Intra-Caribbean air services feature rather steady volumes of passenger traffic which flow along trunk routes (EG POS-GND, GND-BGI, GND-SVD); IM's attempt at hub-and-spokes operations from BGI was thus doomed to fail, as the interconnecting island flights were missing. At the same time, passenger loyalty to LIAT, with its long presence in the marketplace and its well-known schedules featuring trunk-route operations, proved impossible for IM to break. Indeed, LI actually shaped up its operations and ended up very well-run at that time and even earned its first profit while IM floundered. Furthermore, the massive increase in passenger capacity made available by IM was simply too much for the market to absorb.

Furthermore, IM's use of the BAe-146 jets was a major mistake. The short, up-and-down inter-island flights have always proved most economical to be serviced by turboprop aircraft, such as the Dash 8s LI uses. The 146s consumed much larger quantities of fuel and were very expensive to operate on the low-volume hops, thus adding to IM's financial woes. As a result, the frequency of flights was reduced very rapidly. IM's attempts to dovetail its services with BA in Barbados was also problematic; BA usually flies into BGI in the afternoon, meaning that IM flights to other islands were predominantly in the evening and night when Caribbean passengers are known to be diurnal in their flight patterns. Finally, IM's overenthusiastic expansion created a major strain on the carrier's resources and further complicated matters.

So, after all of that occurred within a 2-year period, IM bit the dust and is now a figment of Caribbean aviation history while LIAT is very much alive and well.

As for Ed Acker... well, he nearly ran BWIA into the ground after ruining Pan Am. That is another story though.

Hop to it, fly for life!
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RE: Biggest Mistakes For An Airline

Sat Jun 17, 2000 3:07 am

Could someone explain what was exactly so wrong with the PanAm/National merger?

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