Editing Pan Am (section)

===Downturn===
[[File:AT THE JOHN F. KENNEDY AIRPORT - NARA - 547951 - color adjusted.jpg|thumb|Pan Am [[747-100|Boeing 747-100]] ("Clipper Star of the Union") at [[John F. Kennedy International Airport|John F. Kennedy Airport]] in May 1973]]

====Fallout from 1973 oil crisis====
Pan Am had invested in a large fleet of Boeing 747s, expecting that air travel would continue to increase. It did not, as the introduction of many wide-bodies by Pan Am and its competitors coincided with an economic slowdown. Reduced air travel after the [[1973 oil crisis]] made the overcapacity problem worse. Pan Am was vulnerable, with its high [[overhead (business)|overhead]]s as a result of a large decentralized infrastructure. High fuel prices and its many older, less fuel-efficient [[narrow-body aircraft|narrow-bodied]] airplanes increased the airline's operating costs. Federal route awards to other airlines, such as the [[Transpacific Route Case]], further reduced the number of passengers Pan Am carried and its profit margins.<ref name=chasing/><ref name="PostWar_PanAm_51"/>

[[File:Pan Am 1970s flight attendant.jpg|thumb|A Pan Am flight attendant in 1970s uniform]]

On September 23, 1974, a group of Pan Am employees published an advertisement in ''[[The New York Times]]'' to register their disagreement over federal policies that they felt were harming the financial viability of their employer.{{sfn|Conrad|1999|p=1846}} The ad cited discrepancies in airport landing fees, such as Pan Am paying $4,200 ({{Inflation|US-GDP|4200|1974|fmt=eq|cursign=$}}) to land a plane in [[Sydney Airport|Sydney]], while the Australian carrier, [[Qantas]], paid only $178 to land a jet in Los Angeles. The ad also contended that the [[United States Postal Service]] was paying foreign airlines five times as much to carry US mail in comparison to Pan Am. Finally, the ad questioned why the [[Export-Import Bank of the United States]] loaned money to Japan, France, and Saudi Arabia at 6% interest while Pan Am paid 12%.<ref>{{cite web|url=http://www.panamair.org/History/aware.htm |title=Pan Am AWARE |publisher=Pan Am Air |access-date=June 1, 2009 |date=September 23, 1974 |url-status=dead |archive-url=https://web.archive.org/web/20090611065721/http://www.panamair.org/History/aware.htm |archive-date=June 11, 2009 }}</ref>

By 1976, Pan Am had racked up {{FXConvert|USA|364|m|year=1976|cursign=$|index=US-GDP|showdate=no}} of accumulated losses over a 10-year period, and its debts approached {{FXConvert|USA|1|b|year=1976|index=US-GDP|cursign=$|showdate=no}}. This threatened the airline with bankruptcy. Former [[American Airlines]] vice president of operations, William T. Seawell, who had replaced Najeeb Halaby as Pan Am president in 1972, began implementing a [[turnaround management|turnaround strategy]]: trimming the network by 25%, slashing the 40,000-strong workforce by 30%, cutting wages, introducing stringent economies and rescheduling debt, and reducing the size of the fleet. These measures, aided by the use of [[deferred tax|tax-loss credits]], enabled Pan Am to avert financial collapse and return to profitability in 1977.<ref name="PostWar_PanAm_51"/>

====Attempts to build a US domestic network====
Since the 1930s, Juan Trippe had coveted domestic routes for Pan Am. Through the late 1950s and early 1960s, and in the mid-1970s, there were talks of merging the airline with a domestic operator such as [[American Airlines]], [[Eastern Air Lines]], [[Trans World Airlines]] or [[United Airlines]].<ref name="PostWar_PanAm_48"/> As rival airlines convinced Congress that Pan Am would use its political clout to monopolize US air routes, the CAB repeatedly denied the airline permission to operate in the US, by growth or by a merger with another airline. Pan Am remained an American carrier operating international routes only (aside from [[Hawaii]] and [[Alaska]]). The last time Pan Am was permitted to merge with another airline prior to the [[Airline Deregulation Act|deregulation]] of the US airline industry was in 1950, when it took over American Overseas Airlines from American Airlines.<ref name="PostWar_PanAm_48"/> After deregulation in 1978, more US domestic airlines began competing with Pan Am internationally.{{sfn|Robinson|1994|pp=154–180}}{{sfn|Ray|1999|p=185}}

====National Airlines takeover====
To acquire domestic routes, Pan Am, under president Seawell, set its eyes on [[National Airlines (1934–1980)|National Airlines]]. Pan Am wound up in a bidding war with [[Frank Lorenzo]]'s [[Texas International Airlines]] which boosted National's stock price, but Pan Am was granted permission to buy National in 1979 in what was described as the "Coup of the Decade". The acquisition of National Airlines for {{FXConvert|USA|437|m|year=1979|index=US-GDP|cursign=$|showdate=no}}, completed on January 7, 1980, further burdened Pan Am's balance sheet, already under strain after financing the [[Boeing 747]]s ordered in the mid-1960s. This acquisition did little to improve Pan Am's competitive position in relation to nimbler, lower-cost competitors in a deregulated industry, as National's north–south route structure provided insufficient feed at Pan Am's transatlantic and transpacific gateways in New York and Los Angeles. Apart from the [[Boeing 727]], the airlines had incompatible fleets and [[organizational culture|corporate cultures]]. Pan Am management handled the integration poorly and presided over an increase in labor costs as a result of harmonizing National's pay scales with Pan Am's.<ref>''Aviation News (Pan American Airways: Part 2 – National acquisition)'', pp. 51/2, Key Publishing, Stamford, November 2011</ref> Although revenues increased by 62% from 1979 to 1980, fuel costs from the merger increased by 157% during a weak economic climate. Further "miscellaneous expenses" increased by 74%.{{sfn|Robinson|1994|pp=172–190}}<ref>Interview with Russell Ray. "Death of An American Dream" (film)</ref>

[[File:Pan Am Boeing 737-200 at Zurich Airport in May 1985.jpg|thumb|left|''Clipper [[Berlin|Spreeathen]]'' at [[Zurich Airport|Zurich]] in 1985]]

====Disposal of non-core assets and operational cutbacks====
As 1980 progressed and the airline's financial situation worsened, Seawell began selling Pan Am's non-core assets. The first asset to be sold off was the airline's 50% interest in Falcon Jet Corporation in August. Later in November, Pan Am sold the Pan Am Building to the [[Metropolitan Life Insurance Company]] for {{FXConvert|USA|400|m|year=1980|index=US-GDP|cursign=$|showdate=no}}. In September 1981, Pan Am sold off its [[InterContinental]] hotel chain. Before this transaction closed, Seawell was replaced by [[C. Edward Acker]], [[Air Florida]]'s founder and ex-president, as well as a former [[Braniff International Airways|Braniff International]] [[senior management|executive]]. The combined sale value of the InterContinental chain and the Falcon Jet Corp. stake was {{FXConvert|USA|500|m|year=1981|index=US-GDP|cursign=$|showdate=no}}.<ref>{{cite news|url=http://www.time.com/time/magazine/article/0,9171,924822,00.html|archive-url=https://web.archive.org/web/20070620193442/http://www.time.com/time/magazine/article/0,9171,924822,00.html|url-status=dead|archive-date=June 20, 2007|title=Mid-Air Transfer|work=TIME Magazine|access-date=June 1, 2009|date=September 7, 1981}}</ref><ref name="National_disaster">''Aviation News (Pan American Airways: Part 2 – National acquisition)'', p. 52, Key Publishing, Stamford, November 2011</ref>

Acker followed up the asset disposal program he had inherited from his predecessor with operational cutbacks. Most prominent among these was the discontinuation of the round-the world service from October 31, 1982, when Pan Am ceased flying between [[Delhi]], Bangkok and Hong Kong due to the sector's unprofitability.<ref>{{Cite magazine|url=http://www.flightglobal.com/pdfarchive/view/1982/1982%20-%202274.html |title=More cutbacks at Pan Am |department = Air Transport|magazine =Flight International|date = October 2, 1982|page = 970 |access-date= |archive-date=January 12, 2012 |archive-url= https://web.archive.org/web/20120112203445/http://www.flightglobal.com/pdfarchive/view/1982/1982%20-%202274.html }}</ref> To provide additional seating capacity for its 1983 spring/summer season, the airline also acquired three passenger [[747-200|Boeing 747-200B]]s from [[Flying Tiger Line|Flying Tigers]], who took four of Pan Am's [[747-100]] freighters in return.<ref>{{Cite magazine|url=http://www.flightglobal.com/pdfarchive/view/1982/1982%20-%202769.html |title=Pan Am and Tigers swap aircraft|department = Air Transport|magazine =Flight International|date = December 25, 1982|page = 1795 |access-date= |archive-date=January 12, 2012 |archive-url=https://web.archive.org/web/20120112214719/http://www.flightglobal.com/pdfarchive/view/1982/1982%20-%202769.html }}</ref>

====Fleet restructuring====
Despite Pan Am's precarious financial situation, in the summer of 1984, Acker went ahead with an order for new Airbus models in wide-body and narrow-bodied aircraft, becoming the second American company to order Airbus aircraft, after Eastern Air Lines.<ref>{{cite news|title=Pan Am to spend $1 billion for new planes|url=https://news.google.com/newspapers?nid=1346&dat=19840915&id=6DROAAAAIBAJ&pg=4641,6053209|access-date=October 12, 2012|newspaper=[[Lakeland Ledger]]|date=September 15, 1984|agency=[[The New York Times Company]]}}</ref> These advanced aircraft, economically and operationally superior to the 747s and 727s Pan Am operated at the time, were intended to make the airline more competitive. In 1985, new A310-221s began replacing 727s on the Internal German Services (IGS) and A300s flew in the Caribbean networks later that year. From early 1986, additional new longer range A310-222s replaced some of the 747s on the slimmed-down transatlantic network following [[ETOPS]] certification (approval by the [[Federal Aviation Administration]] (FAA) of transoceanic flying with twin-engined aircraft). The first A310 ETOPS transatlantic route was [[John F. Kennedy International Airport|New York-JFK]] to [[Hamburg Airport|Hamburg]], [[Detroit Metropolitan Airport|Detroit]] to [[Heathrow Airport|London]] followed shortly after that. Pan Am's decision not to take delivery of the A320s and to sell its delivery positions to Braniff meant that the majority of its short-haul US domestic and European feeder routes, and most of its IGS services, continued to be flown with obsolete 727s until the airline's demise. This put Pan Am at a disadvantage against rivals operating state-of-the-art aircraft with greater passenger appeal.<ref name="National_disaster"/> In September 1984, Pan American World Airways created a holding company called ''Pan Am Corporation'' to assume ownership and control of the airline and the services division.

{{Multiple images
| align             = right
| direction         = vertical
| width             = 250
| image1            = Boeing 747SP-21, Pan Am JP5893131.jpg
| caption1          = The [[Boeing 747SP-21]] "Clipper Constitution" on July 1, 1976 at Los Angeles International Airport.
| image2            = United Boeing 747SP Maiwald.jpg
| caption2          = A Boeing 747SP-21 Landing at Los Angeles International Airport in 1990.
}}
{{Multiple image
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| direction         = vertical
| width             = 250
| image1            = Lockheed L-1011-385-3 TriStar 500, Pan American World Airways - Pan Am AN1139713.jpg
| caption1          = The [[L-1011-500]] "Clipper [[Golden Eagle]]" in 1984.
| image2            = United Airlines Lockheed L-1011 TriStar 500 (??) (10265800834).jpg
| caption2          = A Lockheed L-1011-500 of [[United Airlines]] after the sale of the Pan Am Pacific Division in 1985.
}}

==== Sale of Pacific division ====
Given the airline's dire state, in April 1985, Acker sold Pan Am's entire Pacific Division, which consisted of 25% of its entire route system and their major [[Airline hub|hub]] at [[Narita International Airport|Tokyo-Narita]] to [[United Airlines]] for {{FXConvert|USA|750|m|year=1985|index=US-GDP|cursign=$|showdate=no}}. This sale also enabled Pan Am to address fleet incompatibility issues related to the earlier acquisition of National Airlines as it included Pan Am's [[Pratt & Whitney JT9D]]-powered 747SPs, its [[Rolls-Royce RB211]]-powered [[Lockheed L-1011 Tristar|L-1011-500]]s and the [[General Electric CF6]]-powered [[McDonnell-Douglas DC-10|DC-10]]s inherited from National, which were transferred to United along with the Pacific routes.<ref name="PostWar_PanAm_51" /><ref name="NewWorld" /> The sale came the same year as [[1985 Pan Am strike|a month-long strike]] held by the [[Transport Workers Union of America]].

====Establishment of local feeder networks====
In the early 1980s, Pan Am contracted several regional airlines ([[Air Atlanta]], [[Colgan Air]], [[Emerald Air (United States)|Emerald Air]], [[Empire Airlines (1976–1985)|Empire Airlines]], [[Presidential Airways (scheduled)|Presidential Airways]] and [[Republic Airlines (1979–1986)|Republic Airlines]]) to operate feeder flights under the ''[[Pan Am Express]]'' branding.<ref>{{Cite web |url=http://www.departedflights.com/PA090584domestic.html |title=Pan American World Airways 1984 domestic route map, at departedflights.com |access-date=February 25, 2013 |archive-date=October 29, 2013 |archive-url=https://web.archive.org/web/20131029184527/http://www.departedflights.com/PA090584domestic.html |url-status=live }}</ref><ref>{{Cite web |url=http://www.departedflights.com/PA021186domestic.html |title=Pan American World Airways 1986 domestic route map, at departedflights.com |access-date=February 25, 2013 |archive-date=October 29, 2013 |archive-url=https://web.archive.org/web/20131029184528/http://www.departedflights.com/PA021186domestic.html |url-status=live }}</ref>

The acquisition of [[Pennsylvania]]-based [[regional airline|commuter]] airline [[Ransome Airlines]] for {{FXConvert|USA|65|m|year=1986|index=US-GDP|cursign=$|showdate=no}} (which was finalized in 1987) was meant to address the issue of providing additional feed for Pan Am's mainline services at its hubs in New York, Los Angeles and Miami in the United States, and Berlin in Germany.<ref name="National_disaster"/><ref name="NewWorld">{{Cite web |url=http://www.flightglobal.com/pdfarchive/view/1986/1986%20-%202017.html |title=''The new world of Pan American'', ''Flight International'', August 23, 1986, p. 23 |access-date=September 26, 2011 |archive-date=January 12, 2012 |archive-url=https://web.archive.org/web/20120112212826/http://www.flightglobal.com/pdfarchive/view/1986/1986%20-%202017.html |url-status=live }}</ref><ref>[http://www.flightglobal.com/pdfarchive/view/1986/1986%20-%200885.html ''Ransome abandons Delta''] {{Webarchive|url=https://web.archive.org/web/20120114213051/http://www.flightglobal.com/pdfarchive/view/1986/1986%20-%200885.html |date=January 14, 2012 }}, ''Flight International'', April 19, 1986, p. 5</ref><ref>[http://www.flightglobal.com/pdfarchive/view/1986/1986%20-%202015.html ''The new world of Pan American''] {{Webarchive|url=https://web.archive.org/web/20110811230009/http://www.flightglobal.com/pdfarchive/view/1986/1986%20-%202015.html |date=August 11, 2011 }}, ''Flight International'', August 23, 1986, p. 21</ref> The renamed '''Pan Am Express''' operated routes mostly from New York, as well as Berlin, Germany. Miami services were added in 1990.<ref>{{cite news|url=https://query.nytimes.com/gst/fullpage.html?res=950DEEDC113BF930A25752C1A96F948260|title=BUSINESS PEOPLE; Planner for Pan Am Heads Commuter Unit|work=The New York Times|author=Cuff, Daniel F.|date=November 13, 1989|access-date=April 7, 2008}}</ref> However, the regional Pan Am Express operation provided only an incremental feed to Pan Am's international route system, which was now focused on the Atlantic Division.

====US East coast shuttle====
In an attempt to gain a presence on the busy [[Washington, D.C.|Washington]]–New York–Boston commuter air corridor, the [[Ransome Airlines|Ransome]] acquisition was accompanied by the $100&nbsp;million purchase of [[New York Air]]'s shuttle service between Boston, New York, and Washington, D.C. This parallel move was intended to enable Pan Am to provide a high-frequency service for high-[[Yield management#Airlines|yield]] business travelers in direct competition with the long-established, successful [[Eastern Air Lines Shuttle]] operation. The renamed [[Delta Shuttle|Pan Am Shuttle]] began operating out of LaGuardia Airport's refurbished historic [[Marine Air Terminal]] in October 1986. However, it did not address the pressing issue of Pan Am's continuing lack of a strong domestic feeder network.<ref name="National_disaster"/>

====Financial, operational and reputational setbacks====
In 1987, [[Towers Financial Corporation]], led by its CEO [[Steven Hoffenberg]] and his consultant [[Jeffrey Epstein]], unsuccessfully tried to take over Pan Am in a [[corporate raid]] with Towers Financial as their raiding vessel. Their bid failed.<ref name="vanityfair2003">{{cite magazine|last=Ward |first=Vicky |url=https://www.vanityfair.com/news/2003/03/jeffrey-epstein-200303 |title=The Talented Mr. Epstein |magazine=Vanity Fair |date=2011-06-27 |access-date=2020-06-10}}</ref>

[[Thomas G. Plaskett]], a former American Airlines and [[Continental Airlines|Continental]] executive, replaced Acker as president in January 1988 (joining Pan Am from the latter).<ref name="National_disaster"/> While a program to refurbish Pan Am aircraft and improve the company's on-time performance began showing positive results (in fact, Pan Am's most profitable quarter ever was the third quarter of 1988), on December 21, 1988, the bombing of [[Pan Am Flight 103|Pan Am flight 103]] above [[Lockerbie]], Scotland, resulted in 270 fatalities.<ref>{{Cite web |url=http://news.bbc.co.uk/2/hi/uk_news/scotland/6236538.stm |title="Timeline: Lockerbie Bombing", BBC News, September 2, 2009. Retrieved September 10, 2009 |access-date=September 10, 2009 |archive-date=August 23, 2009 |archive-url=https://web.archive.org/web/20090823102111/http://news.bbc.co.uk/2/hi/uk_news/scotland/6236538.stm |url-status=live }}</ref> Faced with a $300&nbsp;million lawsuit filed by more than 100 families of the victims, the airline [[subpoena]]ed records of six US government agencies, including the [[Central Intelligence Agency|CIA]], the [[Drug Enforcement Administration]], and the [[United States Department of State|State Department]]. Though the records suggested that the US government was aware of warnings of a bombing and failed to pass the information to the airline, the families claimed Pan Am was attempting to shift the blame.<ref>{{cite journal|author1=Ludtke, Melissa |author2=Curry, Tom |author3=Schoenthal, Rhea |date=November 20, 1989|url=http://www.time.com/time/magazine/article/0,9171,959126,00.html|archive-url=https://web.archive.org/web/20080307061423/http://www.time.com/time/magazine/article/0,9171,959126,00.html|url-status=dead|archive-date=March 7, 2008|title=Keeping Lockerbie Alive|journal=Time Europe|access-date=June 29, 2009}}</ref>

Also, in December 1988 the FAA fined Pan Am for 19 security failures, out of the 236 that were detected amongst 29 airlines.{{sfn|Ray|1999|p=187}}

====Failed bid for Northwest Airlines====
In June 1989, Plaskett presented [[Northwest Airlines]] with a $2.7&nbsp;billion takeover bid that was backed by [[Bankers Trust]], [[JP Morgan Chase#J.P. Morgan & Company|Morgan Guaranty Trust]], [[Citigroup|Citicorp]] and [[Bache & Co.#Acquisition by Prudential|Prudential-Bache]]. The proposed merger was Pan Am's final attempt to create a strong domestic network to provide sufficient feed for the two remaining mainline hubs at [[John F. Kennedy International Airport|New York JFK]] and Miami. It was also intended to help the airline regain its status as a global airline by re-establishing a sizable transpacific presence. The merger was expected to result in annual savings of $240&nbsp;million.{{sfn|Gandt|1995}}<ref>[http://www.flightglobal.com/pdfarchive/view/1989/1989%20-%201400.html ''Unprofitable Pan Am makes Northwest bid''] {{Webarchive|url=https://web.archive.org/web/20120112203617/http://www.flightglobal.com/pdfarchive/view/1989/1989%20-%201400.html |date=January 12, 2012 }}, ''Flight International'', May 20, 1989, p. 2</ref> However,  billionaire financier [[Al Checchi]] outbid Pan Am by presenting Northwest's directors with a superior proposal.

====Fallout from 1990–91 Persian Gulf War====
The [[Gulf War|first Gulf War]] triggered by the Iraqi [[invasion of Kuwait]] on August 2, 1990, caused fuel prices to rise, which severely depressed global economic activity. This in turn caused a sharp contraction of worldwide air travel demand, plunging once profitable operations, including Pan Am's prime transatlantic routes, into steep losses. These unforeseen events constituted a further major blow to Pan Am, which was still reeling from the 1988 [[Pan Am Flight 103|Lockerbie disaster]]. To shore up its finances, Pan Am sold most of its routes serving London Heathrow – arguably Pan Am's most important international destination – to United Airlines with two Boeing 747s.<ref>Delta questions United / Pan Am deal ''[[Flight International]]'' January 2, 1991 page 5</ref> This left Pan Am with only two daily London flights, serving Detroit and Miami, which both used [[Gatwick Airport|Gatwick]] as their London terminal from the start of the 1990/91 winter timetable. Further asset disposals included Pan Am's sale of its IGS routes to Berlin to [[Lufthansa]] for {{FXConvert|USA|150|m|year=1990|index=US-GDP|cursign=$|showdate=no}}, which became effective at the same time and brought the total value of asset disposals to {{FXConvert|USA|1.2|b|year=1990|index=US-GDP|cursign=$|showdate=no}}.<ref name="National_disaster"/><ref>[http://www.flightglobal.com/PDFArchive/View/1990/1990%20-%203338.html ''Berlin Return boosts Lufthansa’s bid for Interflug''] {{Webarchive|url=https://web.archive.org/web/20120112125715/http://www.flightglobal.com/pdfarchive/view/1990/1990%20-%203338.html |date=January 12, 2012 }}, ''Flight International'', November 7–13, 1990, p. 10</ref> These measures were accompanied by the elimination of 2,500 jobs (8.6% of its workforce). These cutbacks were announced by the airline in September 1990.<ref>{{cite news|url=https://www.nytimes.com/1990/09/20/business/pan-am-to-eliminate-2500-jobs.html|title=Pan Am to Eliminate 2,500 Jobs|work=The New York Times|access-date=June 1, 2009|date=September 20, 1990|last=Weiner|first=Eric}}</ref>