Pan American World Airways and the International Airline Industry

Introduction

"Before it went out of business in December 1991, Pan American World Airways was an airline titan. It began as a Florida seaplane service in 1927, rapidly grew in size and status, and for more than 60 years it bestrode the airline world like a colossus." — Frank Barrett, 2009

The international airline industry of the 21st century is built on the legacy of the air carriers of the 20th century, with Pan American World Airways representing one such pioneering airline. Founded during the 1920s, Pan American World Airways grew from its modest beginnings with a single aircraft to become a leading air carrier for much of the 20th century. Despite the company's bankruptcy in 1991, the leadership team at Pan American was responsible for a number of innovations that would have a lasting influence on the international airline industry. In order to identify these innovations and the corresponding influence they had on the industry, this paper provides a review of the relevant literature, followed by a summary of the research and important findings in the conclusion.

Founding and Early Expansion

Relatively low-cost, efficient, and safe air transportation is available the world over today, but this infrastructure did not simply fall out of the sky, so to speak. It was rather the cumulative result of the contributions of a number of aviation pioneers. According to Kauffman and Hopkins, "Much went into the building of the airline industry. Today, we take it all for granted, but it was a long, hard, and exciting process" (1995, p. 1). One of the early pioneers in the international airline industry was Juan Trippe, the founder of Pan American World Airways. Kauffman and Hopkins report that "Pan American World Airways was started by Juan Trippe in 1927, with a borrowed single-engine plane and a contract from the United States government to fly mail to Cuba. Early in 1928, Trippe obtained his first airmail contracts for seven routes to the Caribbean islands and to Central and South America" (p. 1).

Building on his initial success, Trippe continued to expand the airline with additional routes throughout the Caribbean and eventually into Mexico and other destinations throughout South and Central America (Branson 2007). According to Steele, "Early 1929 saw additional routes through Cuba and Hispaniola to Puerto Rico. At the same time, in Central America, routes were being extended from Mexico to Panama. Later in 1929, routes were added to Cartagena and Maracaibo in South America, and the islands as far south as Port-of-Spain and then to Paramaribo. The Caribbean loop was closed in 1930 and 1931 with the addition of routes to Curacao and Maracay" (2011, p. 4). In addition, Shavit reports that Pan American "purchased Compania Mexicana de Aviacion, S.A., in 1928, and Sociedad Colombo Alemano de Transport Aereos (SCADTA) in 1929. With W.R. Grace and Company, it organized Pan American and Grace Airways (PANAGRA) in 1929" (1992, p. 266). A New York to Buenos Aires route was subsequently acquired from a competitor by Pan American in 1930, as well as a new route to Rio de Janeiro (Shavit 1992).

Transoceanic Flight and Wartime Contributions

The next two decades would also prove to be highly important to the development of the international airline industry, with Trippe being credited as the driving force behind the global aspects of the enterprise. As Branson points out, "It was Trippe's backing of the flying boat, the first Pan Am Flying Clippers, that pioneered global routes: across the Pacific and, in the late 1930s, across the Atlantic. By the end of World War II, Trippe had in place a route system that was truly global" (2007, p. 6). Over time, Pan American would come to operate 37 Flying Clippers based on preliminary route surveys conducted by Charles Lindbergh, which indicated to Trippe — over Lindbergh's protests — that amphibious aircraft were better suited to the Latin American routes he was building (Steele 2007). Larson reports that "Lindbergh concluded after the North Atlantic survey that in a matter of time land planes would eventually be used. Ultimately, Pan American World Airways would make the first commercial transoceanic flights during the 1930s" (2002, p. 6).

The company's fortunes — and eventual influence on the international airline industry — would receive further impetus when the United States entered World War II in 1941. According to Burns of the Pan Am Historical Foundation, "When the United States exploded into World War II, the world's only aircraft that could carry payloads across an ocean were nine Pan Am Boeing 314 Flying Clippers and three that Pan Am had sold to Britain. The U.S. government promptly took over all of Pan Am's over-ocean aircraft, crews and operations. Pan Am, its people and its aircraft, went to war as part of the U.S. military — officially" (2011, p. 3).

These amphibious aircraft played an enormously important role during World War II, transporting key political and military leaders, essential and classified wartime materiel, refugees, and the wounded (Burns 2011). Furthermore, Pan American provided training for military pilots and navigators who would go on to become the backbone of the airline industry following the end of the war (Burns 2011). In fact, eight of the navigators who participated in the retaliatory strike by Jimmy Doolittle following the attack on Pearl Harbor had been trained by Pan American (Burns 2011).