AHC/WI: Pan Am remains a major carrier today

[HongCanucker]

In the 1970s, Pan American World Airways was one of the premier airlines of the world, a symbol of the Jet Age and America's dominance. 20 years later, it was bankrupt and about to fold, its remaining profitable assets having been acquired by other airlines, the result of many factors that worked against the airline's favour.

With any PoD(s) between Pan Am's founding and its fall, could Pan Am have continued to maintain its strength as the more or less de facto flag carrier of the United States, and how might it look today?

NOTE: I'm no businessman, and I understand that there would be big changes involved, but when I was younger I used to fantasize about this kind of scenario as well, and I wanted to get it off my back.

 

[Joseph Solis in Australia]

I think averting the Arab oil embargo would be the good start because it rose the fuel costs that the Pan Am cannot able to bear and have the US government allow Pan Am to have domestic flights aside from its international ones.

 

[HongCanucker]

I think averting the Arab oil embargo would be the good start because it rose the fuel costs that the Pan Am cannot able to bear and have the US government allow Pan Am to have domestic flights aside from its international ones.

Both are good starts for sure. Perhaps earlier deregulation allows Pan Am to establish itself in the profitable domestic market earlier?

 

[Devvy]

Having US domestic flights is essential. For one, it allows Pan Am to make a profit on domestic flights, but also, it allows Pan Am to get international passengers to it's international hubs for the flights rather then lose them to other carriers that do.

 

[Delta Force]

I've read that Pan Am expanded too quickly in the 1970s, purchasing too many widebody aircraft. The combination of rising fuel prices, a poor economic climate, and lower than expected growth in passenger demand left Pan Am with large structural losses.

Being almost solely an international carrier probably didn't help things either. While lack of a domestic network may have worked well under the CAB regulations, once deregulation occured people would have to book a connecting flight with someone else. That in convinces the passenger, loses potential revenues for Pan Am, and ensures domestic airlines are able to profit from Pan Am operations. It may have been difficult to come up with a domestic network while maintaining the Pan Am image, but perhaps a subsidiary could have been found or created, or a merger could have occured.

 

[HongCanucker]

So from what I'm hearing, the best way for Pan Am to survive was to get into the domestic market. But because Pan Am was basically stuck as an international airline for much of its existence until the 1970s, I'm sure that it was too late for the company to be fully salvaged by then. Even buying National did little to help. Could earlier deregulation have helped, or perhaps different laws allowing Pan Am to have a larger stake in domestic flights in the United States?

 

[THE OBSERVER]

I think The Mann had an idea of what could happen a few years back. Let me find the post he made and I can link it.

 

[THE OBSERVER]

Here's the link. Sounds like it could've worked IOTL: https://www.alternatehistory.com/discussion/showpost.php?p=5315937&postcount=27

 

[EternalCynic]

Here's an idea: the 1979 oil crisis worsens to the point that many newly deregulated domestic airlines go bust, threatening to leave large parts of the US without air service. Pan Am also faces trouble, reporting major losses as well.

In 1980, the US Government intervenes by orchestrating the formation of a new "Pan Am" to guarantee comprehensive service throughout the US. Butterflies allow Carter to win re-election. The domestic Pan Am is de facto regulated through loan guarantees, route subsidies, etc. While domestic and international Pan Ams are de jure separate, de facto they are perceived as one entity.

Lower oil prices of the 1980s and a better economy permit an explosive growth of many low cost carriers. Many of them either fail, merge, or move upmarket to compete with Pan Am. Some remain rude and cheap and proud of it.

To this day, Pan Am retains about 60% domestic market share, and its jets are considered flying US Embassies.

 

[GeographyDude]

from this following book which I really enjoyed, I took that three things were involved in Pan Am's demise.

Hard Landing: The Epic Contest for Power and Profits That Plunged the Airlines into Chaos

by Thomas Petzinger, 1995.

1) The Boeing 747 with four gas-guzzling engines, or kerosene-guzzling if you want to be exact. The argument is that this one plane almost bankrupted Boeing, and in the long run did bankrupt Pan Am.

So from what I'm hearing, the best way for Pan Am to survive was to get into the domestic market. . .

2) and Pan Am tried to do this by purchasing and merging with National Airlines, but most of National's routes were north-south (why did Pan Am go through with the merger? because at a certain point the sheer momentum of 'the deal' takes over!) The corporate cultures didn't gel, with the Pan Am pilots calling the National pilots pig haulers or something like that. The National pilots had to file a lawsuit on whether they were to be paid on the same seniority scales as the Pan Am pilots, they won and they were.

3) The Dec. 21, 1988 terrorist bombing of Pan Am 103 over Lockerbie, Scotland, which killed all 259 persons on board as well as eleven persons on the ground certainly did not help matters. This part is sad, and is mainly a full-fledged human story. Looking at only the business aspect, it was one more negative factor added to a company already in decline.

(other people may well get other things from this book)

 

[GeographyDude]

For example, see this part

http://books.google.com/books?id=GF5GZaTd8qsC&pg=PA209&dq=%22to+the+liabilities+and+fixed+costs+Pan+Am+had+already+accumulated%22&hl=en&sa=X&ei=TRR1VOLsIIaXNuCygKgN&ved=0CB8Q6AEwAA#v=onepage&q=%22to%20the%20liabilities%20and%20fixed%20costs%20Pan%20Am%20had%20already%20accumulated%22&f=false


" . . . to the liabilities and fixed costs Pan Am had already accumulated--in buying the 747s, then in buying National Airlines, then in covering the losses generated by both moves . . . "

 

[British Republic]

Firstly Pan Am should be allowed by the CAB to have a "unoffical monopoly" on domestic fights as well as international flights (or at least a domestic dulopoly with TWA). That to me is the main reason why Pan Am failed.

Secondly it needs to have better management after JT retires. Including cutting 747 orders.

Thirdly it needs to have better security (Similar to Israeli Airlines in OTL)

That would be enough in my view