United Airline
Topic Author
Posts: 8766
Joined: Wed Jan 10, 2001 5:24 pm

What Caused Panam To Go Out Of Business?

Tue Oct 10, 2000 3:35 am

Panam was one of the most successful airliner in aviation history. However, due to heavy financial problems they had had over the years, it finally went out of business at early 1991.

I personally believe it is because of their attitude as well as their horrible service. For example: 'You very lucky to be on one of our flights!' etc etc!

What caused it to go down? Any idea? Free comments!

Good luck!
 
ILUV767
Posts: 3035
Joined: Mon May 29, 2000 2:21 pm

RE: What Caused Panam To Go Out Of Business?

Tue Oct 10, 2000 3:52 am

Read the book by Amiee Brat: Glamor and turbulence, it's a biography from a Pan Am flight attendant.

A big thing that led to the downfall of Pan Am was the fact that they operated so many 747s, and didn't have the money to keep them running.

Deregulation was a big factor. After deregulation, airlines like American, Unt=ited, Delta, and even Continental were awarded international routes where Pan Am didn't have the compition before.

Now that hurt Pan Am because of there lack oif a domestic market here in the United States. A passenger going from, oh lets say, Tulsa couldn't get to London very easily, on Pan Am. After Deregulation, a passenger could fly on Delta, American, United, Continetal, TWA and so on.

Maintence probles with there 747s were a big factor.

Flying 747s from JFK to San Juan wasn't making any money.

Trying to be too good.

I remember reading in that book that in 1982, one extra lemmon would cost Pan Am $15  

Hope that Helps
 
N202PA
Posts: 1280
Joined: Tue Jun 06, 2000 9:44 pm

RE: What Caused Panam To Go Out Of Business?

Tue Oct 10, 2000 4:00 am

In reality, the service in the final few years that so many lament was a direct result of a schism that developed throughout the late 70s and early 80s between Pan Am management and Pan Am employees. Management had screwed the employees time and time again; management had killed the pride that Pan Am employees like my mother felt, by selling off the empire piece by piece (ie, the Pacific, the Pan Am Building, the Intercontinental Hotel chain) and making bonehead decisions like the purchase of National Airlines. In the end, Pan Am employees were tired and frustrated at seeing a) their once-proud airline go down the toilet at the hands of the incompetent managment team of the year (which changed more frequently than the flavors at TCBY), and b) the seniority they had built with years of faithful service getting flushed.

This situation, in fact, is not unique to Pan Am at all; many airlines that fail suffer this syndrome right before the end. Continental is the most notable of these examples; service was terrible, employees were embarrassed to work for CO, and the airline was on the verge of going under for the third and final time. The only difference is that CO was fortunate to have acquired the brilliant Gordon Bethune to be their CEO, who righted Continental's ship, and gained back the trust of his employees. Now CO is perhaps one of the best models on how to run an airline. Pan Am wasn't as lucky, and suffered from additional problems that did the airline in (such as not having an American route system that could sufficiently feed their int'l flights, like those of Delta, United, American, etc.).

Since you joined just over a day ago, United, I wouldn't expect you to know this, but this discussion has gone on many times before now, and the answers you require have already been posted. Next time, all you have to do is to use the 'search' tool and input "Pan Am". Here is just one recent thread (from approx. 2 weeks ago) that discussed the subject:

http://www.airliners.net/discussions/general_aviation/read.main/290805/
 
ryanair
Posts: 646
Joined: Tue Jul 06, 1999 1:41 am

RE: What Caused Panam To Go Out Of Business?

Wed Oct 11, 2000 9:05 am

I think the major things was National. They got into a bidding war with EA which saw them pay far too much, borrowing far too much, more money than National could ever create to repay. Of course Pan Am ripped National apart very quickly which was a commercial disaster and put the price up. Then operational costs associated with the 747's etc came into play, multiplied by the number of airlines that were starting toflyinternationally,. Before National the company was dealling with this via the Tristars etc an later tried with the Airbuses but incompetence at the top and lack of cash meant it never worked. Despite that, the bizare intra European Routes, right up until the Gulf War, excluding the period after Lockerbie, in terms of international flights, I'm told by ex senior Pan Amer's and have read the company was profitable on those routes. However losses on the domestic side wiped out the gains internationally and more. If you think about it, almost all of Pan Am's network outside of America remains intact with Delta, United and Lufthansa.

Talking of service I think in the Plaskett days that improved again, as the planes were refurbished and despite evrything people didn't feel nastyness against them as in the "Jump Eddy Jump" days of Acker applied anymore. I don't think many, especially those hired in the Trippe era, believed it was possible for Pan American to go out of business, just wouldn't happen.
 
9V-SPI
Posts: 59
Joined: Sat Sep 02, 2000 5:58 pm

RE: What Caused Panam To Go Out Of Business?

Wed Oct 11, 2000 5:22 pm

I'd say that the final straw was the Lockerbie crash. People lost their confidence in Pan Am. I thought the next airline to go would be TWA after their crash but they seem to be ok.

Mark

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