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Introduction
Pan American Airways is one of the oldest air transport companies that made an immense contribution to its industry. The firm was founded in 1927 by Arnold, Joulett, and Spaatz due to their perceptions of competition with the German airline company that began to provide international flights (Gandt 27). These men had a military background and were proficient in every skill required to start a business in an entirely new market that only began to emerge. Juan Trippe, who already owned an airline startup, soon joined the team and added his political connections and business expertise to Pan Am (Gandt 27). The company began with mail delivery, eventually expanding its operations.
Take Off
The endeavor by a few knowledgeable pilots rapidly turned into a bustling business empire. Pan Am was a major customer for Boeing, whose developments in the 1930s were often unprofitable yet crucial for the future of its industry (Gandt 46). However, the firm pushed toward the use of innovations at a rapid pace. Pan Am began to establish itself in South America first through its Clipper airplanes and new hires (Gandt 67). The company still required new technology for transatlantic flights to become genuinely profitable.
Pan Am in the Jet Age 1950s -1970s
Innovations in the airline industry had a tremendous impact on its growth, and Pan Am capitalized on this opportunity to the best of its abilities. People believed that jets had questionable applications in airlines, as their fuel consumption and high price due to novelty were significant detrimental factors (Gandt 39). However, this fact did not stop Trippe from perceiving the potential of this technology and seeking any possible paths to apply it for international travel. Turning to Boeings help again, Pan Am forced its way through several blocks in the development of all-jet airliners (Gandt 49). This technological leap was secured by Trippes negotiations and expanded the companys reach further.
Pan Am Global Expansion
New markets were ready to be explored as people sought to travel across the globe with the wonders of technology. Pan Am enabled the United States to expand its influence abroad through treaties and regional departments of U.S. organizations (Kivijärvi et al. 35). The firm became a major network that influenced the history of the world. Pan Am had its routes flying even to underdeveloped regions, including South America, Central Africa, and Pacific atolls, not to mention common places, such as numerous European countries (Gandt 115). Pan Am sought to expand at any opportunity through both purchases and investments for new infrastructure.
Pan Am in Pop Culture
Pan Am played a prominent role in representing the countrys advancements on the global stage, to the point of being depicted as one of its symbols of success. Pan Am positioned itself as a synonym of the United States and worked on securing this connection through the All American Flag Line that was depicted in many works of art (Lebovic 72). The firms success even enabled it to attempt proposing government-backed projects that would highlight Pan Ams close ties to the authority.
The Beginning of the End
The Oil Crisis of 1973
The rampant growth of Pan Am led to weaknesses in its structure, stemming from its leaders overconfidence. The company relied heavily on the fuel industry, which took a major hit due to political events occurring in Saudi Arabia that caused a hike in prices (Gandt 169). Pan Am was not ready for such a drastic rise in expenditures and scurried to make adjustments that would alleviate the problem through assistance from the U.S. government.
Deregulation
Another issue that caused a significant blow to Pan Am was the deregulation of airline companies by the United States. Before 1978, the federal Department of Transportation had a limit on the lowest possible price of air travel, yet it was deemed detrimental to competition (Schiller 747). The company would have to optimize its costs and cut a major part of its structure for greater efficiency. Pan Am realized that the emergence of low-cost fliers could bankrupt the firm (Schiller 747). The U.S. government decided to remove this policy and opened the market for entry, simultaneously harming Pan Ams future.
U.S. Government Fines
Simultaneously, Pan Am had a setback due to its issues with the Federal Aviation Administration. After a long period of checks, the firm was found guilty of faulty security measures that could cause loss of life and fined a significant sum, especially since it already caused Boeing crashes (Gandt 119). Despite all its connections, Pan Am could not avoid taking a hit to its budget and reputation.
Pan Am Flight 103
While previous Pan Am issues cost the firm its revenue, Flight 103s toll was measured in lives. In 1988, Pan Ams Boeing-747 was targeted by terrorists, although before the official analysis was released, newspapers already blamed the crash on the aircrafts structural failure, despite the planes recent retrofitting (Gandt 277). Customers became unwilling to travel by Pan Am, as their fears were further pushed to the edge by media companies abusing the tragedy for their profits.
Conclusion
Despite its misfortune, Pan Am attempted to recover and restructure itself to continue onward. The firm sought to merge with other players on the market, albeit unsuccessfully, due to its crippling debt that remained even after the company had to sell a portion of its assets (Petzinger 322). Other options seemed similarly worse, as the firm would have to continue to shrink. By 1990, newer organizations in the airline industry outperformed Pan Am by a significant margin, while older giants started to disappear, and the time for Pan Am to file for bankruptcy came in 1991 (Gandt 291). None of the efforts to rescue Pan Am from closure were successful, and it ceased to exist after a long period of downsizing.
Works Cited
Gandt, Robert L. Skygods: The Fall of Pan Am. William Morrow & Company, 1995.
Kivijärvi, Marke, et al. Performing Pan American Airways Through Coloniality: an ANTi-History Approach to Narratives and Business History. Management & Organizational History, vol. 14, no. 1, 2018, pp. 3354.
Lebovic, Sam. A Righteous Smokescreen: Postwar America and the Politics of Cultural Globalization. U of Chicago P, 2022.
Petzinger, Thomas. Hard Landing: The Epic Contest for Power and Profits That Plunged the Airlines into Chaos. Currency, 2010.
Schiller, Reuel. The Curious Origins of Airline Deregulation: Economic Deregulation and the American Left. Business History Review, vol. 93, no. 4, 2019, pp. 729753.
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