Spectacular Failures - Pan Am hits major turbulence (Transcript)
Read the transcript for our episode “Pan Am hits major turbulence.”
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Greg Newman: Hi! Welcome to Pan Am
When Jeri Zurhorst and Beth Sarno arrive at the Pan Am Layover Lounge in Columbus, Ohio, they’re in desperate need of some cocktails. It’s cold out and they need to warm up. Inside, they are welcomed by an enthusiastic man wearing a very blue Pan Am suit.
Greg Newman: Here is your boarding pass. If you wanna hang out here for a minute. We'll get you boarding momentarily.
Boarding passes in hand, Jeri and Beth are next greeted by the flight purser.
Jacob Trevino: Julia and Frances, they’ll be your hostesses. Anything you need whatsoever please feel free to ask them.
The women hand their coats to an air hostess and settle in with their husbands for some pre-flight cocktails. Pretty soon they’ll be ditching this Rust Belt drab for the Don Ho vibes and pristine pink beaches of sunny Hawaii.
Jacob Trevino: Welcome to our Columbus location. We just opened today. We're featuring nonstop service to Hawaii on our new 747 that just rolled off the assembly line. So hopefully you guys are interested in adventure right now.
Woo, boy howdy, are Jeri and Beth ever interested in adventure! And cocktails. Mostly just cocktails. They each order the “Beach Blanket Bingo” — a rum drink that’s served on fire. Which they love. Oh, and the free cigarettes. They love those, too.
Jeri: I've never smoked before. Do I do it well?
Lauren: Let me see.
Beth : I used to…
Lauren: Wow. That was quite a flourish.
Jeri looked like a regular Virginia Slims gal. But don’t go thinking I was actually encouraging any nicotine consumption. The cigarettes were fake.
In fact, this whole place is fake. The entire lounge, decorated with Pan Am memorabilia from cookbooks to carry-ons, isn’t really a lounge at all. It’s just an empty retail space in a cool loft apartment building. The Hawaiian themed drinks? They’re real, but the tiki bar isn’t. The purser and the ticket agent are real people, but they don’t work for Pan Am.
They run something called Gorilla Cinema, an “immersive experience” company from Cincinnati. And the Pan Am Layover Lounge is their creation. It’s meant to be a throwback to a time when flying was exciting and glamorous and not all coffin-sized bathrooms and basic economy where you have to pay $15 to get one peanut.
Jacob Trevino: I think when you flew Pan Am, you got exceptional food, exceptional cocktails. [Ducked]
That’s Jacob Trevino, who runs Gorilla Cinema.
[And so how do we revive that feeling and...] how do we kind of bring Pan Am and that nostalgia to the modern day? So we created this lounge that is kind of a make-believe of sorts of creating the experience of what it would be like to fly on a Pan Am plane without actually going into the airplane. So how do you create that...
A pop-up is the only way anyone could experience a flight on the
“world’s most experienced airline,” as it called itself. As an international air carrier, Pan Am closed up shop in 1991.
But for decades, Pan Am had been America’s “chosen instrument” — its de facto flag carrier, synonymous with game-changing innovation, international jet setting and white-glove service. But it wasn’t to last. A government set on deregulation, an unprecedented terrorist attack, and a series of disastrous business moves grounded the world’s most experienced airline for good.
I’m Lauren Ober and from American Public Media, this is Spectacular Failures, the show that manages to find room in the overhead bin even though failure is always trying to hog the space.
PART ONE
Ed Trippe grew up in what he calls an “airline family.” Basically the family station wagon was an airplane.
Ed Trippe: I was seven days old and was picked up by dad at the Doctors Hospital in New York in a seaplane.
Like the kind of plane that lands and takes off from water. And probably doesn’t have seat belts or room for a car seat. Anyway.
Ed Trippe: And my mother and my nurse and dad were all bundled into the seaplane. He took off from the East River and flew out to East Hampton, which was his home.
Ed’s father, Juan Trippe, was the head of Pan American Airways. And planes were his life. They had been since from the time he was a tyke.
Ed Trippe: The story is that he was 10 years old and his father took him down to the foot of Manhattan and they saw the Wright brothers flying around the Statue of Liberty. And he used to go to Central Park with his little model airplanes he'd build. And from an early age, he had an interest, as I think a lot of boys at that age did.
After his freshman year at Yale, Juan Trippe left college and joined the Navy where he got his pilot’s license flying bombers at night without any lights. Sounds dangerous but also very sort of Humphrey Bogart.
After the military, Trippe returned to college, got his degree and like a good Yale man, got a job on Wall Street. But selling bonds steps from where he’d watched the thrilling Wright Brothers wasn’t for him. So he ditched the world of finance and founded a little airline called Long Island Airways.
Ed Trippe: Long Island Airways was really just a collection of all surplus Navy aircraft from the war. And he fixed them up, put new engines in them and used them to fly, you know, wealthy people to go out to the Hamptons in the summer and Atlantic City.
Ed says his father also had a little sideline hustle as a bootlegger. He’d fly up to Canada, pack his plane with booze and head back to New York. I mean, it was Prohibition times after all and the bluebloods needed their G&Ts!
Over the next couple of years, Trippe’s interest in the nascent aviation business grew. So he drafted his wealthy pals — like, no braggies, the Rockefellers and the Whitneys— into investing in a new airline venture.
Now this was the late 1920s. Outside of occasional private flights to the Hamptons, most people with means traveled by train or by ship. Passenger planes weren’t really a thing. Until Juan Trippe really made them a thing. But we’re getting ahead of ourselves. Before planes carried people to far off lands, they carried mail.
Janet Bednarek: In the United States, commercial aviation really began following two major actions by the U.S. Congress.
That’s Janet Bednarek. She’s a history professor at the University of Dayton and an expert in aviation history.
Janet Bednarek: One was the passage of the Air Mail Act, which turned over the air mail routes that had been pioneered by the post office to private carriers. And the second was the Air Commerce Act, which set up regulations for any new airlines and airplanes that came about as a result of turning over the post office’s air mail system to private carriers.
So basically, the U.S. Postal Service didn’t want to get into the messy business of flying mail around. So it contracted with private companies — sometimes just a dude with a plane — to ship the post hither and yon. And one of those carriers was Juan Trippe’s second aviation venture, the newly formed Pan American Airways.
Janet Bednarek: In 1927, Congress put out for bid the contract to carry the mail in Latin America. And it was actually a German company that wanted to bid on it. But two American U.S. Army Air Corps officers decided that they did not want a German air carrier carrying the U.S. mail in Latin America because they were worried about the security of the Panama Canal.
So thanks to a little jingoism, Trippe’s vision of running a commercial airline was realized. Pan Am started carrying sacks of mail between Key West and Havana.
From there, the airline expanded its fleet and its services. Now, this was at a time when taking to the skies was still straight up wizardry. Like this old-timey movie says.
CLIP [China Clipper]: Flying will never get anywhere. It’s no good, it’s too dangerous./You’re nuts.
But was flying totally nuts? In 1927 — the same year Pan Am got off the ground — famed aviator Charles Lindbergh became the first person to fly across the Atlantic Ocean solo. It took him 33 and a half hours and when he returned to the U.S., he was feted as a national hero.
[Cheering from Lindbergh’s return]
Until he got real into eugenics and Nazi sympathizing. Then he wasn’t such a hero, was he?
But the collective excitement around air travel couldn’t be denied. Even though the early days of flying were um, the pits. See, back in the day the cabins weren’t pressurized.
Janet Bednarek: So you flew through weather, you flew through a lot of turbulence. You could get very ill. Some of the very early airliners actually had windows that could open.
Lauren: Wait, you could actually, on an early passenger plane, open a window and throw up out the side?
Janet Bednarek: Yes.
Lauren: That is incredible and also terrifying.
Now I’m going to draw a line straight from Juan Trippe’s entrepreneurial elan to me not hanging my head out of an airplane window to barf. Here’s why — Trippe was all about innovation. Not only did he want to grow the aviation business by landing more airmail routes and eventually ferrying fancies to exotic destinations. But he also wanted bigger, better, faster planes. He just loved the technology of it all.
Ed Trippe: Dad was always sort of pushing the envelope, trying to find a next sort of step in the future of aviation and he may have gotten a little bit ahead of himself in not understanding the market. I think what drove the business in those days of that first decade was the, you know, his commitment to the new successive generations of aircraft.
One of the planes Trippe commissioned was the Clipper. This was essentially a giant flying boat. It had four massive propellers and a big hull that could finally carry passengers. Because the Clipper took off and landed in water, it allowed Pan Am to reach locales that didn’t yet have airport infrastructure. And that meant the potential to travel to even farther off lands.
Before the Clipper, no passenger planes had flown transoceanic flights. But Juan Trippe knew his plane could make those long journeys. And he knew that passengers would want to take the risk. He just needed the powers that be to believe in him and his aircraft. But his investors were like no flipping way Juan Trippe, you’re bananas. So they needed to be won over.
CLIP [China Clipper]: Wait a minute, listen to me.
Here’s a fictionalized version of Trippe’s motivational speechifying from the 1936 film “China Clipper.”
CLIP [China Clipper]: The only reason that aviation has advanced this far is that because from the very start a few people insisted on doing what others said was impossible. The Wright brothers for instance. Bleriot, Curtis, Lindberg. There have always been skeptics who said it can’t be done. We have those today. But you men are part of aviation. You owe it to yourselves, to the industry, to go ahead.
But it was going to take more than some cheerleading from Trippe to get his Clipper fleet flying across oceans. For one, there were no aviation maps for the places Trippe wanted to go. Minor detail. So he had to chart them himself.
Safi Bahcall: What do you do when everybody says you can't do it? And there's no possible way. And you can't see any solution. Well, you go to the New York Public Library, and that's exactly what Trippe did.
That’s Safi Bahcall. He wrote about Pan Am in his book “Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries.”
Safi Bahcall: So he goes into the New York Public Library, gets some old maps and some old charts, and he discovers a couple of uncharted islands. You know, sort of buried in the back of these old maps. You know, one of them was Wake Island. Then there was Midway, then there was Guam. And all of these at the time were not well known.
But, Bahcall says, the U.S. government did have some sort of historic claim over these places. Colonialism is trash, but it worked in Trippe’s favor. Especially since he was pals with FDR.
Safi Bahcall: So he pulls a couple of strings and he actually talks to the president who makes a phone call. And as you can imagine, when the president makes a phone call, all of a sudden the Army starts jumping and says, yes, sir. Mr. Trippe, you want the contract to build a base there. That sounds fine.
So, working his presidential connections, Trippe basically got the U.S. government to build bases on these far-flung islands so his Clippers could stopover on their way to Japan or the Philippines. That’s some legit influence.
CLIP [China Clipper]: ...stopping at Honolulu, Midway, Wake, Guam, Manila, all aboard!
In 1936, the first Pan Am trans-Pacific passenger flight left San Francisco and seven days later landed in Manila. A ticket cost about $1,700, which in 2020 money would be about, um, $32,000.
But people paid the big-ticket prices and Juan Trippe’s airline took off. Take that, skeptics!
Ed Trippe: But he very much believed that the aviation industry, the international aviation industry was going to be a great factor in bringing greater understanding among nations of the world and peoples of the world.
After Pan Am conquered the Pacific routes in the mid-1930s, the airline cruised into a period of explosive growth and competition. Particularly between Trippe and Howard Hughes, the movie mogul turned airline owner. Hughes controlled the rival airline, TWA, and was pushing it to be number one.
Their rivalry was captured in the 2004 biopic “The Aviator” starring noted bachelor Leo DiCaprio as an increasingly unstable Hughes and Alec Baldwin as the patrician Trippe. Here they are (very slowly) debating the feasibility of flying passengers across the Atlantic.
CLIP [Aviator]:
Juan Trippe: Isn’t that too far?
Howard Hughes: New York, to Newfoundland, to Ireland, to Paris.
I’m sorry for all the gross food sounds in your ears. They’re eating in a supper club. What can you do?
Juan Trippe: Well, Pan Am welcomes you. We’re overbooked as it is. It’s such a burden doing it all on your own, let me tell you.
Alec Baldwin’s character wasn’t just being bitchy. Pan Am was kind of doing it all on its own. Trippe’s company was miles out in front of its competitors, largely because of Trippe’s political connections and fearlessness. And his deep love affair with airplanes didn’t hurt, says Safi Bahcall.
Safi Bahcall: So when Juan Trippe founded Pan Am in 1927, he was this wild, innovative product engineer type who kept designing and working on better planes and better engines. Bigger, faster, better. And that succeeded. He helped grow Pan Am into the most famous airline in the world. No other airline has ever achieved the scale and fame that they did.
Through the 1940s and 50s, Pan Am continued to soar. The world became ever smaller for those who could afford a ticket on one of Trippe’s Clippers. And then came perhaps the biggest disruptor in aviation history — the Boeing 707.
CLIP [Jet Age Promo]: So vast an Earth, so little time until now, until the birth of this new age, the age of the jet.
[Music]
Ok, cut the track.
In 1958, Pan Am made history again when it ushered in the Jet Age with a flight from New York to Paris on the Boeing 707. A U.S. Army band serenaded the 111 passengers as they walked out on the tarmac and up the stairs to the jetliner. The first jet named “Clipper America” made its maiden voyage across the Atlantic in just six and a half hours, rather than the nine that it took a prop plane.
CLIP [Pan Am Jet Age Video]: It took Sir Francis Drake three years to circle the globe. Pan American’s Jet Clipper can fly around the world in less than three days.
The time saved wasn’t the only perk of the jetliners. They also flew above the weather making for a smoother flight. Plus without the rumbling of propellers, the flight felt no different than traveling on a bus or a train.
And then there was the service. And the service was, ooh man, it was next level.
I’m talking a full selection of magazines, games for the kids, a rump roast sliced seat-side. You want a gimlet on the rocks or maybe a Manhattan served in proper barware? Not a problem for the flight attendants slash bartenders. Leave your Pall Malls at home? No worries! The stewardesses were happy to provide cigarettes. CIGARETTES!
CLIP [6 ½ Magic Hours, Pan Am film]: Welcome aboard. Welcome aboard this spacious cabin. Attractively decorated, air conditioned, but draft free.
In this 1958 promotional video, passengers could not look more pleased to be hurtling through space in a jet-powered tin tube.
CLIP: Roominess extends even to the powder rooms, which look like those in a private home.
Ok, the lady passengers are powdering their noses in airplane bathrooms that are TRULY bigger than my bathroom at home.
CLIP: Scenes of living room quiet and relaxation, the mood enhanced by lighting that can be changed from the pale pink of dawn through all the variations to the dark blue of night.
Oh my god you would not believe this. The lady’s chair is reclined so much that it’s basically a La-Z-Boy right now. And the flight attendant is tucking her in with a real blanket. She has a full-sized pillow, she’s reclined like she’s going to watch “Leave It To Beaver” and OH DID I MENTION… she’s getting tucked in. Why was I not alive in the Jet Age?
But Pan Am luxury, it wasn’t just great for passengers. The airline had real cachet for the pilots and crew as well.
Robert Gandt began his flying career with Pan Am in 1965 — the height of cool for the airline. He was part of a crop of military flyboys who began flying for Pan Am after their service was over.
Robert Gandt: In 1965, we could have gone with any airline in the country, American, United, Delta. But to me, Pan Am was the creme de la creme. They had the most international routes in the whole world. They went to the glamorous places London, Paris and Tokyo, instead of Kansas City and Topeka and Detroit and all of the boring places. So that was, that was no contest.
I’m sorry to those places. I’m sure they’re not really boring. But the truth was that Pan Am traded on the glamour of international travel. Journeying to distant shores and all that. At Pan Am’s peak, the world seemed by turns impossibly vast and suddenly accessible.
Robert Gandt: Looking back on it, it was pretty exotic. In the mid ‘60s still, new hire flight attendants were all single. Had to be. And about half of ‘em were foreign nationals and these were French girls. British girls. Japanese girls. Swedish. And they're mostly gorgeous. And we were all young, twentysomething year old pilots right out the military and thought we'd landed in heaven.
Well, ok they were women, not girls. But the Pan Am pilots called themselves Sky Gods, so what do you expect?
During Gandt’s tenure as a Pan Am pilot, the airline became synonymous with service and style and international jet-setting. The fancies loved it. If you don’t believe me, maybe you’ll believe my friend, legendary actress Joan Crawford.
CLIP [Joan Crawford, Pan Am ad]: When I fly, I try to fly Pan Am. You see, I’m not crazy about flying. But Pan Am is the world’s most experienced airline. I don’t know what that means to you, but I do know what it means to me.
At its peak in the 1960s, Pan Am was the second most recognizable brand in the U.S. behind Coca-Cola. It was the first airline to fly passengers across the Pacific and the Atlantic. It was the first to fly jets. And it was the first to serve lobster tails on fine china.
In 1963, Pan Am built its soaring 59-story Brutalist headquarters in New York City, still one of the tallest buildings in the U.S. Pan Am brought the Beatles to America for the first time in 1964. And in 1968, Stanley Kubrick enshrined the airline in his science-fiction epic “2001: A Space Odyssey.” The brand’s influence on the culture of the day was undeniable.
Juan Trippe made the world smaller. He was the ultimate Sky God. In 40 years, Trippe had taken Pan Am from an island-hopping airmail carrier to a global transportation juggernaut. But in 1968, Trippe hung up his wings and retired from the company. Though not before making a big final move: dropping a half-billion dollars for 25 new Boeing 747s, a model that Trippe pushed the aircraft company to create.
The plane revolutionized international air travel. But Pan Am’s risky purchase was the first in a series of events that would ultimately lead to the behemoth’s downfall.
We’re going to take a quick break. When we come back, how the world’s most experienced airline has trouble getting off the ground thanks to a recession, a terrorist attack and a whole load of debt in the cargo hold.
PART TWO
When Wendy Sue Knecht got hired to work for Pan Am in the 1970s, it felt like the height of chic.
Wendy Sue Knecht: I remember my friends and my family, they were just in awe because they knew that, you know, Pan Am really hired the cream of the crop.
Knecht was a flight attendant on the world’s most experienced airline. And as such, the standards were very high. Like maybe a little too high.
Lauren: How did you have to present yourself? What were the rules around that?
Wendy Sue Knecht: Well, that was part of the equation that I was terrified about because for my final interview, I was pretty much starved to like, you know, I think it was 103 pounds.
Lauren: Oh no!
Wendy Sue Knecht: Yeah. Because I was so afraid I wasn't going to make the weigh-in. We had a little allotment. If you were a small, medium or large-boned. So my maximum weight with my uniform on was 105 because I'm small-boned and I'm only 5'2".
I think we can all acknowledge there’s something deeply troubling about this.
Wendy Sue Knecht: My roommate after training in Miami, she was fired for being four pounds overweight.
Lauren: Aww. I mean four pounds is like, great, you had one hamburger and you have your period.
Wendy Sue Knecht: Exactly, it could just be a bad couple of days.
Despite the weird weight restrictions, Knecht loved her job. Even though she came aboard just after Pan Am’s Golden Age, the airline still had its glamorous vibe. It owned the Intercontinental Hotel chain so Knecht always stayed in luxury. Plus, there was still fancy champagne in first class and the food on the plane came from Maxim’s of Paris, which at the time was the most famous restaurant in the world.
But the ‘70s were a rough time for Pan Am. If you remember, right before Juan Trippe left the company, he put in a half-billion-dollar order for 25 of the most sophisticated planes to fly the friendly skies. The 747s pushed air travel into a new stratosphere, carrying more people than any plane had before.
But, says our pal Janet Bednarek from the University of Dayton…
Janet Bednarek: The timing was just all wrong. You get the first of the oil shocks. There's a recession going on. The planes were very, very expensive. And so, yeah, that's when Pan Am’s debt burden begins to become what weighs them down and will end with their demise.
Trippe spent a lot of time building the greatest commercial air fleet in the world. But he didn’t burn a lot of energy on the small-ball stuff like developing a better booking system or creating a frequent flyer program like his competitors were doing. His eyes were on the prestige, says Safi Bahcall. Though ultimately to Pan Am’s detriment.
Safi Bahcall: After a while, that wheel, that cycle of let's build a bigger, faster, better plane, a bigger, faster, better plane, carry more passengers further and further. After a while that cycle, that wheel turns one too many times. And boom, you're left with some big giant product with no market that nobody wants.
In 1973 the OPEC nations proclaimed an oil embargo and gas became a bajillion dollars. Very inconvenient, especially when Pan Am had hangars full of fancy new jets. Then from ‘73 to ‘75, there was a worldwide recession and you know what people don’t want to do in a recession? Spend big cash flying to Tahiti or Tokyo or hell, even Hawaii.
So Pan Am’s brand spanking new 747s were flying all over the world with loads of empty seats. And that wasn’t good for business.
Janet Bednarek: A lot of the, kind of, carefree glamor of the Jet Age begins to wear fairly thin during the 1970s.
By the end of that decade, the airline industry would fly through the greatest turbulence it had ever experienced. But before we can talk about that, we have to know a little something about the business of the modern airline industry. Because just like your old Facebook relationship status... it’s complicated.
Ahmed Abdelghany: First of all, airlines or aviation business is similar to any other businesses. They are selling a product pretty much, which is the seats that you buy on any of those Web sites.
That’s Ahmed Adbelghany. He’s a professor at Embry Riddle Aeronautical University’s business school. And the business of flying is his expertise.
So on its face, the aviation industry seems like it’s just about sales. Sell enough tickets at the right price to the right destinations and you should be fine. But when does any industry that’s that huge get to be that basic? Never.
Ahmed Abdelghany: As an airline management, you are not working on your own. You are interacting with many other entities in the industry including governments, including airports, including customers, including alliances, partners, competition, aircraft suppliers and so on. So most likely your decision will be impacted by one of those surrounding entities, which add another layer of complexity of that business.
Not only that, but airlines are constantly negotiating with the governments of their home countries as well as foreign nations. To use some sexy business jargon, there are a lot of stakeholders.
And the more moving pieces a business has, the more things can go caput.
Ahmed Abdelghany: Just as an indication of how complex it is, is when you see many airlines go to the graveyard.
And that’s exactly what happened in 1978. See 1978, in addition to being the year of my GLORIOUS BIRTH, was the year that airline deregulation happened. And boy, that was a real buzzkill.
Basically, the federal government wanted to spur competition in an industry that up to that point didn’t have much. For the most part, the ticket prices to particular destinations were standardized.
Janet Bednarek: The prices were all set by the Civil Aeronautics Board until 1978, and so having the best, the most glamorous service was the way you competed.
Which is why Pan Am spent so much money on white-glove amenities.
Janet Bednarek: The airlines all competed to have, you know, the best meals, the most comfortable seats, the prettiest stewardesses. The largest segment of the traveling population were men traveling on business. And the airlines thought that you know, pretty girls would appeal to that segment of the traveling public.
Gag. Whatever.
The airline industry had been regulated like that since the Great Depression, says Paul Stephen Dempsey. He’s the director emeritus of the Institute of Air and Space Law at McGill University and an expert in airline deregulation.
In order to shore up American industry in a time of economic freefall, FDR regulated just about everything.
Paul Stephen Dempsey: The idea was simply to have the government stabilize the infrastructure industries. So at the time, it was not just the regulation of airlines, it was regulation of all modes of transportation, it was regulation of securities, regulations of radio communication to stabilize the economy. And it had that effect, it stabilized those industries. And as a consequence, with the infrastructure stable, we eventually could rebuild the economy.
But by 1978, the federal government was like “We’ve had 40 years of stabilization! We’re stable enough already! Enough with the stabilization, you babies! We want to get our free market on!”
Paul Stephen Dempsey: Well, The Airline Deregulation Act of 1978 was designed explicitly so that in one phase there would be more opportunities for carriers to fly new routes that they are not flying now. And in another, there'd be an opportunity for carriers to extricate themselves from routes that they would prefer not to fly. There would be more pricing flexibility, but not totally deregulated until 1985.
And like a good expert source, Dempsey has an analogy for airline deregulation that we can all understand.
Paul Stephen Dempsey: It’s sort of like if you took zoo animals. And you decided to take them out of the zoo and put them in the wild. They might have a little difficulty at first surviving. And that's kind of what the airlines were. They were used to an environment of managed competition.
Basically the government had protected airlines from the ups and downs of the economy.
And so these wild animals were trying to figure out how to forage for themselves in the plains of the Serengeti.
Obviously, there was resistance to deregulation within the industry. I mean, what zoo animal, after years of getting taken care of, wants to fend for itself in the wild? But as Alfred Kahn, chief architect of deregulation, explained to free market cheerleader William F. Buckley on his TV show, it was also consumer-focused. The people wanted cheap-o tickets.
CLIP [Alfred Kahn]: In a free market, competition will give you very low prices in areas in which costs are very low. And on dense routes where you can use great big planes and you can fill them full, partly by offering discount seats, when you’re not selling your regular seats at the full fare, you can have very low average fares. And also of course there’s more competition there.
Now this was especially difficult for Pan Am for two reasons. One was that because so much of its business was focused on service, a Pan Am flight cost a lot of money to operate. I mean that Beluga caviar and flight attendant turndown service ain’t gonna pay for itself.
Two, was that because Pan Am had been an international airline since the time it was delivering mail, regulations had kept it from developing a domestic route service. No boring flights to Des Moines or Cleveland.
Janet Bednarek: And so if you wanted to fly Pan Am, you needed to get to one of the places where Pan Am flew out of.
And once Pan Am realized it might be handy to have a way for passengers in say, Topeka, to get to Miami for their flight to Rio, it was too late.
Janet Bednarek: So Pan Am has to scramble in this mess to try and acquire domestic routes. It finally does, but again, at a very heavy cost.
In 1980, Pan Am acquired National Airlines for way more than it was worth. And rather than buoy Pan Am, the purchase further tanked the suffering air carrier.
In this post-deregulation world, where the airline industry was reduced to rates and routes, things weren’t looking so hot for Pan Am. But they were in good company.
Paul Stephen Dempsey: Every major airline that existed in 1978, every interstate carrier has gone through bankruptcy. So it's been an enormously painful period.
So let’s do a quickie recap here: Pan Am was flying high with oysters Rockefeller and easy-on-the-eyes stewardesses until 1968 when Juan Trippe retired. The company then was mired in debt thanks to a half-billion dollar airplane purchase right when the 1973 oil embargoes made all transportation crazy expensive. A recession followed by a free market bonanza aka deregulation didn’t help. Pan Am had no domestic service and couldn’t compete with the other airlines that did. Its disastrous acquisition of National Airlines did little to mitigate that.
Then, in 1981, the airline’s visionary founder Juan Trippe died. Which at least meant he wasn’t around to witness what happened next.
The 80s saw a revolving door of Pan Am CEOs who reduced the once-mighty airline to a minor player in the aviation game. They sold off important routes and slashed staff, but it made virtually no difference. Pan Am was in a tailspin. And that was a real bummer for employees like Robert Gandt who were still super loyal to the company.
Robert Gandt: You know, Pan Am, what had been the premier airline in the world. And we all still had this pride. And watching it slowly crumble, it's like owning an old mansion that you can't, nobody can keep up anymore. And you see it falling apart.
The death knell for the airline came in 1988 with Pan Am Flight 103 — the Lockerbie bombing.
CLIP [ABC News]: Pan Am’s Flight 103 had been in the air for an hour. The 747 was en route from London to New York and then Detroit. According to Pan American, there were more than 240 passengers on board and a crew of 15. It was after dark. For reasons we do not yet understand, the plane with 50,000 gallons of fuel onboard plunged into a small Scottish market town. Pan American is not aware that any of the passengers or crew has survived.
A Libyan intelligence officer was claimed to have slipped a bomb into the baggage hold of Clipper Maid of the Seas, one of Pan Am’s prized 747s. The bomb was concealed inside a tape recorder, which was in a suitcase, and within 20 minutes of the flight’s departure from London, the explosives had blown a huge hole in the plane’s fuselage.
CLIP: Shortly after it was seen crashing into the Scottish town of Lockerbie, near Scotland’s border with England...
The attack killed 270 people.
In the ‘70s and ‘80s, terrorists and hijackers targeted Pan Am flights, says Janet Bednarek, because it was considered America’s de facto flag carrier — the nation’s airline. That ended with Flight 103.
Janet Bednarek: That kind of was the final blow to Pan Am. And it just simply couldn't recover.
In the aftershock of that tragedy, Pan Am tried to stay afloat, brokering deals with United and Delta to buy its remaining prime routes. But it was a last-gasp situation. In January 1991, the world’s most experienced airline filed for bankruptcy. And by the end of that year, Pan Am was effectively done.
CLIP: You’d think they were saying goodbye to an old friend. But for many that’s exactly what this airplane is. It was the first commercial 747 to come off of Boeing’s assembly line and it’s Pan American Airlines’ last 747 flight. That’s why it’s near and dear to so many./ This airplane has seen better days and so has the company, and now this is the end and it’s just like breaking up a marriage after 50 years. It’s not an easy thing to let go of.
There are a million reasons why Pan Am took a nosedive — Juan Trippe focused too much on bigger, better, faster aircraft and not enough on business. A lack of domestic routes, oil shocks, and deregulation. Maybe it was just their time.
In the end, perhaps it’s a good thing that it collapsed. Hear me out: Pan Am rang in the Jet Age, a new era of excitement and exploration when everything seemed possible, at least for the people who could afford to feel excited.
And Pan Am was sexy. It made flying sexy, too. It’s been featured in dozens of TV shows and movies, including 2002’s ultra-stylish “Catch Me If You Can.” Pan Am just had a mystique that other airlines didn’t.
But times change and customers’ needs shift. Pan Am’s star power was not made for the world of ultra-low-cost air carriers where passengers are nickel and dimed on everything from checked luggage to snack packs to even occasionally bathrooms.
Pan Am was of another age, before the internet was filled with amateur videos of passenger meltdowns and flight attendant tirades. And even though the airline went out with a whimper, the brand’s legacy lives on in the hearts of the folks who flew for and with Pan Am. The nostalgia for Pan Am and the golden age of flying didn’t die, even though the company did. Maybe in the end all that experience did amount to something.
[Pan Am Jingle: Experience is knowing what to do. We’ve done it all before. Over and over and over…]
Spectacular Failures is a production of American Public Media. It’s written and hosted by me, chief baggage handler Lauren Ober. First Officer Whitney Jones is the show’s producer. Our editor is platinum frequent flyer, Phyllis Fletcher. Air traffic controller David Zha is our assistant producer. Our theme music is by the delightful David Schulman. Other original music this season comes from Jenn Champion and Michael Cormier. Kristina Lopez is our Audience Engagement Editor and Lauren D.E.E. is our executive producer. Concept by Tracy Mumford. The general manager of APM Studios is Lily Kim. Both Pan Am pilot Robert Gandt and flight attendant Wendy Sue Knecht wrote books about their experience at the airline. If you want to check out those or any of the books we referenced in this episode, go to our website, spectacularfailures.org. We have a list. Oh and super special thanks to Gorilla Cinema out of Cincinnati for letting us crash their layover lounge.
Lauren: What kind of nuts are these, macadamia nuts?
Jeri: Do you want some?
Lauren: No no no, no nuts for me. This is so close to my face.
Jeri: Why, you don’t like nuts?
Beth: So you refuse to eat my nuts?
Lauren: Jesus!
