WEBVTT 00:00:00.000 --> 00:00:02.779 Welcome back to the deep dive. Today we are going 00:00:02.779 --> 00:00:05.759 to talk about a symbol. It's a logo that I guarantee 00:00:05.759 --> 00:00:07.519 you recognize even if you're too young to have 00:00:07.519 --> 00:00:09.419 ever actually flown on the airline that used 00:00:09.419 --> 00:00:13.359 it. It's a blue globe and it's overlaid with 00:00:13.359 --> 00:00:16.980 these clean sort of swept back white lines. It's 00:00:16.980 --> 00:00:19.899 affectionately known in the design world as the 00:00:19.899 --> 00:00:22.600 blue meatball. The blue meatball. It's I mean 00:00:22.600 --> 00:00:26.559 it is. arguably one of the most recognized corporate 00:00:26.559 --> 00:00:28.820 logos of the entire 20th century. It's right 00:00:28.820 --> 00:00:31.160 up there with Coca -Cola, with Ford, you know, 00:00:31.179 --> 00:00:33.899 the golden arches. Absolutely. We are talking, 00:00:33.939 --> 00:00:35.880 of course, about Pan American World Airways. 00:00:36.020 --> 00:00:38.799 Pan Am. And this isn't just a story about an 00:00:38.799 --> 00:00:40.899 airline. This is a story about an entity that 00:00:40.899 --> 00:00:43.780 for a while practically acted like its own nation 00:00:43.780 --> 00:00:46.039 state. It really did. Yeah. It was the unofficial 00:00:46.039 --> 00:00:48.299 flag carrier of the United States. It completely 00:00:48.299 --> 00:00:51.039 defined luxury air travel. It ushered in the 00:00:51.039 --> 00:00:53.579 jet age. It brought the Beatles to America. It 00:00:53.579 --> 00:00:56.320 was the airline James Bond flew. It was kind 00:00:56.320 --> 00:00:59.100 of the default airline in your head for global 00:00:59.100 --> 00:01:02.039 travel. And yet on a Wednesday in December 1991. 00:01:02.439 --> 00:01:05.400 And it just stopped. It vanished. That is the 00:01:05.400 --> 00:01:07.579 central paradox we need to unpack today. Because 00:01:07.579 --> 00:01:09.700 usually when you have a company that has that 00:01:09.700 --> 00:01:12.239 level of cultural dominance, I mean, a near monopoly 00:01:12.239 --> 00:01:15.400 on the very idea of international travel, it 00:01:15.400 --> 00:01:19.290 takes a lot to kill it. But Pan Am died. And 00:01:19.290 --> 00:01:22.349 it died hard. It was a truly spectacular collapse. 00:01:22.569 --> 00:01:25.230 And what makes it so fascinating to study, especially 00:01:25.230 --> 00:01:27.269 with the stack of documents we have here, is 00:01:27.269 --> 00:01:28.890 that it wasn't just one thing. It wasn't just 00:01:28.890 --> 00:01:31.530 bad management or a single bout of bad luck. 00:01:31.709 --> 00:01:34.650 It was this perfect storm of regulatory shifts, 00:01:34.810 --> 00:01:37.569 massive geopolitical changes, and some incredibly 00:01:37.569 --> 00:01:40.430 bold, and you could say perhaps too bold, strategic 00:01:40.430 --> 00:01:42.849 gambles that just didn't pay off. We have a massive 00:01:42.849 --> 00:01:44.870 amount of ground to cover. We've got historical 00:01:44.870 --> 00:01:47.310 records going all the way back to the 1920s. 00:01:47.310 --> 00:01:49.530 We have fleet manifests. bankruptcy filings, 00:01:49.530 --> 00:01:51.629 even personal accounts from the final days. It's 00:01:51.629 --> 00:01:54.510 a huge story. It is. But to understand how the 00:01:54.510 --> 00:01:57.189 blue meatball stops spinning, we have to understand 00:01:57.189 --> 00:01:59.709 how it started spinning in the first place. And 00:01:59.709 --> 00:02:01.709 honestly, reading through this origin story, 00:02:01.890 --> 00:02:05.409 it reads less like a business biography and more 00:02:05.409 --> 00:02:09.090 like a Tom Clancy novel. It really does. I think 00:02:09.090 --> 00:02:11.210 most people assume Pan Am started because, you 00:02:11.210 --> 00:02:14.250 know, some enterprising businessman saw a market 00:02:14.250 --> 00:02:16.430 for flying people to the Caribbean for tourism. 00:02:16.800 --> 00:02:19.280 That's exactly what I assumed. Sun, sand, and 00:02:19.280 --> 00:02:21.819 maybe some rum cocktails. But that was just the 00:02:21.819 --> 00:02:24.259 cover. The actual motivation for the founding 00:02:24.259 --> 00:02:27.340 of Pan Am was purely military. It was a geopolitical 00:02:27.340 --> 00:02:29.840 chess move orchestrated by the U .S. Army. This 00:02:29.840 --> 00:02:31.699 is the part that just blew my mind in the research. 00:02:31.780 --> 00:02:34.840 We have to go back to 1927. The world is obviously 00:02:34.840 --> 00:02:38.419 a very different place. Aviation is, well, it's 00:02:38.419 --> 00:02:40.659 in its infancy. Purely. And down in Colombia, 00:02:40.919 --> 00:02:43.300 very close to the Panama Canal, there is an airline 00:02:43.300 --> 00:02:47.020 called SCATA. SCATA. which was actually the first 00:02:47.020 --> 00:02:49.479 airline in the Americas. But here's the problem 00:02:49.479 --> 00:02:52.539 for the United States. SCATA was Colombian on 00:02:52.539 --> 00:02:55.360 paper, but in reality, it was German -owned and 00:02:55.360 --> 00:02:58.300 German -operated. And in the late 1920s, the 00:02:58.300 --> 00:03:00.340 U .S. military is looking at the Panama Canal, 00:03:00.439 --> 00:03:02.759 which is, I mean, it's basically the most strategic 00:03:02.759 --> 00:03:04.819 waterway in the world for the U .S. Navy. Absolutely 00:03:04.819 --> 00:03:08.099 critical. And they see German pilots flying German 00:03:08.099 --> 00:03:11.580 planes just a few hundred miles away, and they 00:03:11.580 --> 00:03:14.240 are not happy about it. Exactly. The War Department 00:03:14.240 --> 00:03:17.039 started getting very, very nervous. They received 00:03:17.039 --> 00:03:19.360 intelligence that SCADA was actively lobbying 00:03:19.360 --> 00:03:22.139 for landing rights in the Panama Canal zone itself. 00:03:23.159 --> 00:03:25.500 The official reason was they wanted to survey 00:03:25.500 --> 00:03:28.340 routes for passenger connections up to the U 00:03:28.340 --> 00:03:31.180 .S. Sure, passenger connections. But two U .S. 00:03:31.199 --> 00:03:34.840 Army officers, Major Hap Arnold and Major Carl 00:03:34.840 --> 00:03:36.979 Spatznames, you'll recognize from World War II, 00:03:37.159 --> 00:03:39.919 they looked at this and said, absolutely not. 00:03:40.080 --> 00:03:42.840 They viewed it as a precursor to a threat. I 00:03:42.840 --> 00:03:44.819 mean, it's obvious. If you have German planes 00:03:44.819 --> 00:03:47.979 serving the canal, you have German bombers within 00:03:47.979 --> 00:03:50.500 range of the canal. Precisely. So Arnold and 00:03:50.500 --> 00:03:53.199 Spatz realized they couldn't just ban SCADA. 00:03:53.319 --> 00:03:55.699 That would cause a huge diplomatic incident with 00:03:55.699 --> 00:03:58.159 Colombia. They needed to beat them at their own 00:03:58.159 --> 00:03:59.879 game. So they needed an American alternative? 00:03:59.979 --> 00:04:02.300 They needed an American commercial carrier to 00:04:02.300 --> 00:04:04.199 dominate the region so there would be no excuse, 00:04:04.319 --> 00:04:06.900 no reason for SCADA to expand northward. They 00:04:06.900 --> 00:04:09.650 needed a chosen instrument. There's that phrase, 00:04:09.870 --> 00:04:12.289 the chosen instrument. It appears all over these 00:04:12.289 --> 00:04:14.789 early documents. It sounds almost religious or 00:04:14.789 --> 00:04:17.050 like something from a sci -fi movie. But in this 00:04:17.050 --> 00:04:19.689 context, it's a specific policy doctrine, isn't 00:04:19.689 --> 00:04:22.329 it? It is, yeah. The chosen instrument was this 00:04:22.329 --> 00:04:25.230 idea that international aviation was just too 00:04:25.230 --> 00:04:28.250 expensive, too risky, and way too politically 00:04:28.250 --> 00:04:31.810 sensitive for open competition. The government 00:04:31.810 --> 00:04:34.410 believed that to project American power abroad, 00:04:34.730 --> 00:04:37.509 they should support a single private monopoly. 00:04:38.079 --> 00:04:40.019 So they would pick one winner. They'd pick one 00:04:40.019 --> 00:04:42.439 winner and then protect it from all other American 00:04:42.439 --> 00:04:44.060 competitors. They'd clear the field for them. 00:04:44.160 --> 00:04:47.060 So enter Juan Trepe. Enter Juan Trepe. He is 00:04:47.060 --> 00:04:49.720 the sort of protagonist of our story. He was 00:04:49.720 --> 00:04:51.980 young, he was wealthy, and he was incredibly 00:04:51.980 --> 00:04:54.600 connected. He founded a company called the Aviation 00:04:54.600 --> 00:04:59.040 Corporation of the Americas in June 1927. You 00:04:59.040 --> 00:05:01.660 just have to look at his backers. Cornelius Vanderbilt, 00:05:01.740 --> 00:05:05.110 Whitney. W. Avril Harriman. These are not just 00:05:05.110 --> 00:05:07.629 investors. These are like American royalty. This 00:05:07.629 --> 00:05:10.170 is the establishment. Exactly. Yeah. This was 00:05:10.170 --> 00:05:13.709 old money and immense political influence. But 00:05:13.709 --> 00:05:16.189 here's the funny thing. Trebe had all the connections, 00:05:16.370 --> 00:05:18.949 but he didn't have the landing rights in Havana, 00:05:18.949 --> 00:05:21.740 Cuba. There were actually three different American 00:05:21.740 --> 00:05:25.399 groups fighting for this one crucial mail contract. 00:05:25.519 --> 00:05:27.480 Right. The U .S. Post Office put out a bid for 00:05:27.480 --> 00:05:31.339 mail delivery from Key West to Havana. And this 00:05:31.339 --> 00:05:34.079 was the mechanism to block the Germans. Win that 00:05:34.079 --> 00:05:36.439 mail contract, establish the route, and you lock 00:05:36.439 --> 00:05:39.100 them out. But it was a complete mess. One group 00:05:39.100 --> 00:05:40.839 had the planes. Another group had the landing 00:05:40.839 --> 00:05:43.120 rights. And Trippe had the political backing. 00:05:43.360 --> 00:05:45.720 And the army basically grabbed all three of them 00:05:45.720 --> 00:05:48.660 by the collars and said, merge now. A shotgun 00:05:48.660 --> 00:05:51.259 wedding. A total shotgun wedding. They realized 00:05:51.259 --> 00:05:53.139 that if these Americans kept infighting, the 00:05:53.139 --> 00:05:56.459 Germans would win by default. So in 1927, Pan 00:05:56.459 --> 00:05:58.860 American Airways is born and they cut it so close. 00:05:58.939 --> 00:06:00.699 I love the detail in the records about the very 00:06:00.699 --> 00:06:03.040 first flight. They had a deadline to move the 00:06:03.040 --> 00:06:06.180 mail by October 19th, 1927, or they would lose 00:06:06.180 --> 00:06:08.420 the contract entirely. And they didn't have a 00:06:08.420 --> 00:06:11.439 plane ready. Theirs was literally stuck in the 00:06:11.439 --> 00:06:14.529 mud in New Jersey. They had to charter a Fairchild 00:06:14.529 --> 00:06:17.230 float plane from a tiny Dominican carrier at 00:06:17.230 --> 00:06:20.329 the very last minute. The pilot, Cy Caldwell, 00:06:20.550 --> 00:06:23.850 literally flew the mail bag to Havana, landed, 00:06:24.029 --> 00:06:27.389 and saved the contract with hours to spare. They 00:06:27.389 --> 00:06:29.470 didn't even own the aircraft for their own inaugural 00:06:29.470 --> 00:06:31.930 flight. Not at all. Talk about fake it till you 00:06:31.930 --> 00:06:35.370 make it. Wow. But once they secured that contract, 00:06:35.610 --> 00:06:38.069 the chosen instrument policy really kicks in. 00:06:38.129 --> 00:06:40.009 And this is where the growth becomes just... 00:06:41.300 --> 00:06:43.620 Because the government effectively insulated 00:06:43.620 --> 00:06:46.339 Pan Am from any domestic competition. Right. 00:06:46.399 --> 00:06:48.459 If you were a domestic airline back then, like 00:06:48.459 --> 00:06:50.920 United or TWA, and you wanted to fly to South 00:06:50.920 --> 00:06:52.939 America, the government would just say, sorry, 00:06:53.120 --> 00:06:56.000 that's Pan Am's turf. So Trippe used this protection 00:06:56.000 --> 00:06:58.519 to build an empire. He went on a buying spree. 00:06:58.560 --> 00:07:00.839 He bought up all these struggling little airlines 00:07:00.839 --> 00:07:03.560 in Mexico, Central America, the Caribbean. He 00:07:03.560 --> 00:07:05.360 was basically playing a real life game of risk. 00:07:05.480 --> 00:07:08.670 And he was partnering up too. He was. He partnered 00:07:08.670 --> 00:07:10.670 with shipping companies, like the Gray Shipping 00:07:10.670 --> 00:07:13.910 Line, to form Pinagra. He was painting the map 00:07:13.910 --> 00:07:17.089 blue, one country at a time, and he was doing 00:07:17.089 --> 00:07:20.069 it with a real flair for marketing. This brings 00:07:20.069 --> 00:07:22.850 us to the famous tour he took with Charles Lindbergh 00:07:22.850 --> 00:07:26.709 in 1929. Lindbergh was, I mean, he was the most 00:07:26.709 --> 00:07:29.290 famous man on the planet at that point, after 00:07:29.290 --> 00:07:32.170 his solo Atlantic flight. Absolutely. Having 00:07:32.170 --> 00:07:35.029 him on board was a massive coup. It was a masterstroke. 00:07:35.050 --> 00:07:38.139 He was a technical advisor for Pan Am. So Tripper 00:07:38.139 --> 00:07:40.540 and Lindbergh flew all around Latin America together, 00:07:40.699 --> 00:07:43.060 negotiating landing rights directly with presidents 00:07:43.060 --> 00:07:45.920 and heads of state. They were essentially conducting 00:07:45.920 --> 00:07:48.519 U .S. foreign policy from the cockpit of a Sikorsky 00:07:48.519 --> 00:07:50.660 amphibian. And they just squeezed the German 00:07:50.660 --> 00:07:52.480 interests out route by route. Squeezed them right 00:07:52.480 --> 00:07:55.740 out. So by the mid -1930s, Pan Am basically owns 00:07:55.740 --> 00:07:58.639 Latin America. But the real legend of Pan Am, 00:07:58.699 --> 00:08:00.600 the imagery that we all have in our heads, that 00:08:00.600 --> 00:08:02.839 comes from the next phase, the conquest of the 00:08:02.839 --> 00:08:06.949 oceans, the Clipper era. Ah, the Clippers. This 00:08:06.949 --> 00:08:09.610 is where the branding genius of Juan Tripe really, 00:08:09.850 --> 00:08:13.610 really shines. You have to remember, in the 1930s, 00:08:13.629 --> 00:08:16.829 flying was still seen as incredibly dangerous, 00:08:17.110 --> 00:08:19.649 loud, and uncomfortable. Right. The pilots were 00:08:19.649 --> 00:08:22.449 still seen as barnstormers. Exactly. They wore 00:08:22.449 --> 00:08:25.209 leather jackets, oil -stained scarves, and goggles. 00:08:25.430 --> 00:08:27.970 It was a daredevil profession, not a luxury one. 00:08:28.220 --> 00:08:30.639 And Tropez wanted to change that perception completely. 00:08:30.939 --> 00:08:32.840 He wanted to compete with the ocean liners, the 00:08:32.840 --> 00:08:35.600 grand ships like the Queen Mary or the Normandy. 00:08:35.740 --> 00:08:38.620 So he borrowed their language. He started calling 00:08:38.620 --> 00:08:41.340 his planes clippers after the great 19th century 00:08:41.340 --> 00:08:43.759 sailing ships. He called the pilots captains 00:08:43.759 --> 00:08:46.779 and the co -pilots first officers. Pure maritime 00:08:46.779 --> 00:08:49.320 terminology. And the uniforms, this is a detail 00:08:49.320 --> 00:08:51.500 I love. He got rid of the leather jackets and 00:08:51.500 --> 00:08:53.779 put his crews in naval -style double -breasted 00:08:53.779 --> 00:08:56.039 jackets and these pristine white officer caps. 00:08:56.340 --> 00:08:58.909 It was pure theater. It was, but it had a very 00:08:58.909 --> 00:09:01.289 specific psychological purpose. When you see 00:09:01.289 --> 00:09:03.549 a pilot step out of a plane in a naval uniform, 00:09:03.789 --> 00:09:05.889 you don't think daredevil. You think authority, 00:09:06.070 --> 00:09:08.710 stability, maritime competence. It was designed 00:09:08.710 --> 00:09:11.309 to calm the passenger's nerves. And the planes 00:09:11.309 --> 00:09:14.549 themselves were just... These flying boats, the 00:09:14.549 --> 00:09:17.950 Boeing 314. The 314 was a palace. It wasn't a 00:09:17.950 --> 00:09:20.389 plane. It was a flying hotel. It had full dining 00:09:20.389 --> 00:09:23.690 rooms with white linen tablecloths and real silverware. 00:09:23.830 --> 00:09:26.309 It had sleeping berths that converted from the 00:09:26.309 --> 00:09:28.730 seats. It had separate dressing rooms for men 00:09:28.730 --> 00:09:31.190 and women. It was the absolute height of luxury. 00:09:31.409 --> 00:09:33.909 But while the passengers are, you know, enjoying 00:09:33.909 --> 00:09:36.809 five course meals, the logistics required to 00:09:36.809 --> 00:09:39.870 keep those planes in the air were. They were 00:09:39.870 --> 00:09:41.990 absolutely insane. Especially across the Pacific. 00:09:42.190 --> 00:09:44.250 Right. This brings us to the Pacific. And I think 00:09:44.250 --> 00:09:46.230 this is the most underappreciated part of the 00:09:46.230 --> 00:09:47.950 Pan Am story. We look back now and think, oh, 00:09:47.990 --> 00:09:50.629 they flew to China. But if you look at a map 00:09:50.629 --> 00:09:54.009 in 1935, flying from San Francisco to Manila 00:09:54.009 --> 00:09:56.909 seems, well, it seems physically impossible. 00:09:57.309 --> 00:09:59.370 It was considered impossible by almost everyone. 00:09:59.509 --> 00:10:01.429 The range of the aircraft at the time, the Martin 00:10:01.429 --> 00:10:04.429 M -130, was about 2 ,400 miles comfortably. But 00:10:04.429 --> 00:10:07.590 the Pacific is just... You can't just fly straight 00:10:07.590 --> 00:10:09.850 across. You need stepping stones. But there are 00:10:09.850 --> 00:10:11.909 no stepping stones out there. It's just ocean. 00:10:12.210 --> 00:10:15.490 Well, there are dots on the map. Tiny, uninhabited 00:10:15.490 --> 00:10:19.789 coral atolls. Midway, Wake Island, Guam. Trip 00:10:19.789 --> 00:10:21.649 A looked at the map and said, we'll use those. 00:10:21.929 --> 00:10:23.529 But Wake Island wasn't a place you could just 00:10:23.529 --> 00:10:26.090 land a plane. It was a coral reef with some birds 00:10:26.090 --> 00:10:28.490 on it. There was nothing there. Exactly. There 00:10:28.490 --> 00:10:30.690 was no fresh water, no food, no electricity, 00:10:30.809 --> 00:10:34.059 and certainly no hotel for the passengers. So 00:10:34.059 --> 00:10:36.259 before Pan Am could fly a single passenger across 00:10:36.259 --> 00:10:38.960 the Pacific, they had to launch a full -blown 00:10:38.960 --> 00:10:41.480 colonization expedition. The SS North Haven. 00:10:41.639 --> 00:10:44.899 The SS North Haven. In 1935, they chartered this 00:10:44.899 --> 00:10:48.799 15 ,000 -ton merchant ship. And they loaded it 00:10:48.799 --> 00:10:51.039 with everything you could possibly imagine. Lumber, 00:10:51.240 --> 00:10:53.759 diesel generators, refrigerators, radios, canned 00:10:53.759 --> 00:10:56.080 food, furniture. They even brought soil, didn't 00:10:56.080 --> 00:10:58.039 they? They brought tons of topsoil so they could 00:10:58.039 --> 00:11:00.279 plant gardens for fresh vegetables. They brought 00:11:00.279 --> 00:11:02.639 prefab hotel sections. They literally sailed 00:11:02.639 --> 00:11:04.799 to these desolate rocks in the middle of the 00:11:04.799 --> 00:11:07.200 Pacific and built fully functioning villages 00:11:07.200 --> 00:11:09.139 from scratch. And they had to clear the lagoons. 00:11:09.259 --> 00:11:11.159 Right, because these were flying boats. They 00:11:11.159 --> 00:11:14.000 landed on the water. But the lagoons were filled 00:11:14.000 --> 00:11:16.779 with coral heads. These sharp rock formations 00:11:16.779 --> 00:11:18.860 just below the surface that would rip the hull 00:11:18.860 --> 00:11:20.980 of the plane open. So they sent divers down. 00:11:21.179 --> 00:11:22.759 They sent divers down with dynamite. They had 00:11:22.759 --> 00:11:24.940 to blast runways into the coral reefs. It was 00:11:24.940 --> 00:11:27.279 an underwater construction project. All of this 00:11:27.279 --> 00:11:29.639 just to refuel the plane. Just to refuel the 00:11:29.639 --> 00:11:32.039 plane. The passengers sleep for the night because 00:11:32.039 --> 00:11:33.799 they didn't fly at night. So you'd fly for 10 00:11:33.799 --> 00:11:36.279 or 12 hours, land in this beautiful lagoon at 00:11:36.279 --> 00:11:39.019 Wake Island, take a launch to a hotel that Pan 00:11:39.019 --> 00:11:41.460 Am built from nothing, have a steak dinner that 00:11:41.460 --> 00:11:43.539 was flown in from San Francisco, sleep in a Pan 00:11:43.539 --> 00:11:45.779 Am bed, and then get back on the plane the next 00:11:45.779 --> 00:11:48.419 morning. That is the definition of full service. 00:11:48.559 --> 00:11:51.519 And the result of all of this was the China Clipper. 00:11:51.740 --> 00:11:55.580 November 1935, the first scheduled airmail flight 00:11:55.580 --> 00:11:59.320 across the Pacific. It cut the travel time from 00:11:59.320 --> 00:12:02.850 San Francisco. to Manila, from three weeks on 00:12:02.850 --> 00:12:05.850 a steamship down to six days. It was a miracle. 00:12:06.129 --> 00:12:10.350 It made the world effectively 70 % smaller overnight. 00:12:10.730 --> 00:12:13.629 It was a monumental achievement. And shortly 00:12:13.629 --> 00:12:15.950 after that, they conquered the Atlantic with 00:12:15.950 --> 00:12:19.309 the Yankee Clipper in 1939, which was the first 00:12:19.309 --> 00:12:22.730 transatlantic passenger flight. New York to Southampton 00:12:22.730 --> 00:12:25.909 via a few stops in Canada and Ireland. Another 00:12:25.909 --> 00:12:29.049 incredible feat. But looking at the dates... 00:12:29.879 --> 00:12:33.279 1939, the party was about to end. World War II. 00:12:33.500 --> 00:12:35.480 World War II. And this is where the chosen instrument 00:12:35.480 --> 00:12:37.820 policy really, really paid off for the U .S. 00:12:37.820 --> 00:12:40.200 government. When the war started, the military 00:12:40.200 --> 00:12:43.279 didn't have a global air transport network. Pan 00:12:43.279 --> 00:12:45.639 Am was the network. So they pivoted instantly 00:12:45.639 --> 00:12:48.340 from luxury travel to military transport. They 00:12:48.340 --> 00:12:51.200 did. Pan Am flew over 90 million miles for the 00:12:51.200 --> 00:12:53.639 military during the war. They ferried generals. 00:12:53.759 --> 00:12:56.019 They ferried critical supplies. They even flew 00:12:56.019 --> 00:12:58.600 components for the Manhattan Project. Franklin 00:12:58.600 --> 00:13:01.299 Roosevelt became the first sitting U .S. president 00:13:01.299 --> 00:13:03.899 to fly abroad. And he did it on a Pan Am Clipper, 00:13:03.980 --> 00:13:06.279 the Dixie Clipper, to meet Churchill in Casablanca. 00:13:06.360 --> 00:13:09.340 So 1945 comes around. The war ends. The Allies 00:13:09.340 --> 00:13:11.820 win. Pan Am has served its country with distinction. 00:13:12.460 --> 00:13:14.480 Juan Trepe probably thought, OK, now we really 00:13:14.480 --> 00:13:16.639 cash in. Now we rule the world. He certainly 00:13:16.639 --> 00:13:19.340 expected that. He pushed hard for the government 00:13:19.340 --> 00:13:22.279 to formalize his monopoly. He wanted Pan Am to 00:13:22.279 --> 00:13:24.740 be the officially designated flag carrier of 00:13:24.740 --> 00:13:27.000 the United States, you know, enshrined in law 00:13:27.000 --> 00:13:29.659 forever. But the political winds had shifted 00:13:29.659 --> 00:13:33.100 completely. Drastically. The Roosevelt and Truman 00:13:33.100 --> 00:13:35.200 administrations were looking at the post -war 00:13:35.200 --> 00:13:37.840 world, and they decided that monopolies were 00:13:37.840 --> 00:13:40.649 fundamentally un -American. They wanted competition. 00:13:41.009 --> 00:13:43.389 They believed competition would lower prices 00:13:43.389 --> 00:13:46.929 and spur innovation. So instead of giving Tripe 00:13:46.929 --> 00:13:49.350 the crown he wanted, they started handing out 00:13:49.350 --> 00:13:51.549 international route authorities to his competitors. 00:13:52.269 --> 00:13:55.570 Suddenly, TWA was allowed to fly across the Atlantic 00:13:55.570 --> 00:13:58.570 to Europe. United Northwest Airlines were allowed 00:13:58.570 --> 00:14:01.450 to fly to Hawaii and into Asia. That must have 00:14:01.450 --> 00:14:04.029 been a profound shock to Tripe. It was seen as 00:14:04.029 --> 00:14:06.809 a betrayal in Tripe's eyes. The chosen instrument 00:14:06.809 --> 00:14:10.259 was dead. The era of protection was over. So 00:14:10.259 --> 00:14:12.200 how does he respond? He doesn't seem like the 00:14:12.200 --> 00:14:14.240 kind of guy who just shrinks and accepts a smaller 00:14:14.240 --> 00:14:17.559 market share. Not at all. His new strategy was 00:14:17.559 --> 00:14:20.259 if he couldn't have a monopoly on routes, he 00:14:20.259 --> 00:14:22.200 decided he would have a monopoly on technology. 00:14:22.399 --> 00:14:25.360 He would simply fly faster, bigger and more advanced 00:14:25.360 --> 00:14:27.980 aircraft than anyone else. He decided Pan Am 00:14:27.980 --> 00:14:30.879 would single handedly usher in the jet age. And 00:14:30.879 --> 00:14:33.720 this brings us right to the Boeing 707. Pan Am 00:14:33.720 --> 00:14:37.039 was the launch customer. October 1958, Pan Am 00:14:37.039 --> 00:14:39.460 inaugurates daily jet service from New York to 00:14:39.460 --> 00:14:42.000 Paris. And again, you have to put this in context. 00:14:42.340 --> 00:14:45.399 Before the jet, that flight took 12 to 14 hours 00:14:45.399 --> 00:14:48.159 rattling around in a noisy piston engine plane. 00:14:48.360 --> 00:14:50.779 With at least one refueling stop. Right. The 00:14:50.779 --> 00:14:53.980 707 did it nonstop in seven hours. It was smooth. 00:14:54.120 --> 00:14:56.080 It was quiet. You were flying above the weather. 00:14:56.279 --> 00:14:59.009 It was. It was revolutionary. It changed the 00:14:59.009 --> 00:15:01.409 geography of the world again. Europe was suddenly 00:15:01.409 --> 00:15:03.610 a long weekend trip from New York. But Trippi 00:15:03.610 --> 00:15:05.809 didn't stop there. He did something that I think 00:15:05.809 --> 00:15:07.669 defines the modern world of travel more than 00:15:07.669 --> 00:15:09.909 anything else. He commissioned the jumbo jet, 00:15:10.090 --> 00:15:13.169 the Boeing 747. This is the biggest gamble in 00:15:13.169 --> 00:15:15.429 the history of commercial aviation. Without a 00:15:15.429 --> 00:15:18.309 doubt. By the mid -60s, air travel was growing 00:15:18.309 --> 00:15:21.169 like crazy. Airports were getting crowded. Trippi 00:15:21.169 --> 00:15:23.889 went to Boeing and said, I need a plane that 00:15:23.889 --> 00:15:26.190 is two and a half times the size of the 707. 00:15:26.370 --> 00:15:28.590 And Boeing was hesitant, right? They thought 00:15:28.590 --> 00:15:30.889 the future was supersonic. They were focused 00:15:30.889 --> 00:15:33.509 on building an SST to compete with the Concorde. 00:15:33.690 --> 00:15:35.750 Everyone thought supersonic was the future. The 00:15:35.750 --> 00:15:38.289 747 was actually seen as a bit of a stopgap. 00:15:38.490 --> 00:15:40.529 Boeing designed it thinking it would mostly be 00:15:40.529 --> 00:15:42.570 a cargo plane in the long run. That's why it 00:15:42.570 --> 00:15:44.610 has that distinctive hump, so the nose could 00:15:44.610 --> 00:15:47.009 swing up to load freight. But Trippi forced their 00:15:47.009 --> 00:15:49.909 hand. He forced their hand. He placed a massive 00:15:49.909 --> 00:15:54.850 $525 million order in 1966. That is billions 00:15:54.850 --> 00:15:57.519 and billions in today's money. He bet the entire 00:15:57.519 --> 00:16:00.059 company on this single idea that air travel would 00:16:00.059 --> 00:16:02.259 become a mass market commodity. And that's a 00:16:02.259 --> 00:16:04.399 key distinction. The Clipper era was for the 00:16:04.399 --> 00:16:07.600 elite, the super wealthy. The 747 was for everyone. 00:16:07.919 --> 00:16:09.759 It was the democratization of global travel. 00:16:10.059 --> 00:16:12.039 Pan Am had already introduced tourist class, 00:16:12.120 --> 00:16:15.480 what we now call economy class, on their DC -6Bs 00:16:15.480 --> 00:16:18.519 years earlier. But the 747 was the first plane 00:16:18.519 --> 00:16:21.279 built for it. 400 people on a single aircraft. 00:16:21.559 --> 00:16:23.980 It was unheard of. Before we get to how that 00:16:23.980 --> 00:16:27.259 massive gamble paid off, or spoiler alert, didn't, 00:16:27.259 --> 00:16:30.360 we have to talk about the cultural peak of Pan 00:16:30.360 --> 00:16:32.980 Am in the 1960s. Because it wasn't just about 00:16:32.980 --> 00:16:36.080 the planes, it was the whole vibe. It was the 00:16:36.080 --> 00:16:38.879 world's most experienced airline? Yeah. That 00:16:38.879 --> 00:16:42.049 was their slogan? And they backed it up. They 00:16:42.049 --> 00:16:44.610 were everywhere. They even built their own hotel 00:16:44.610 --> 00:16:46.850 chain, the Intercontinental Hotels. Why did they 00:16:46.850 --> 00:16:49.409 do that? Because Trippi realized that in some 00:16:49.409 --> 00:16:51.710 of these new exotic destinations they were flying 00:16:51.710 --> 00:16:54.450 to, there weren't any hotels up to American standards. 00:16:54.649 --> 00:16:56.990 So he just built them himself. It was vertical 00:16:56.990 --> 00:16:59.750 integration on a global scale. And the architecture. 00:17:00.460 --> 00:17:02.820 The Pan Am building in New York, right on top 00:17:02.820 --> 00:17:05.339 of Grand Central Terminal, it completely blocked 00:17:05.339 --> 00:17:07.779 the view down Park Avenue. It was this massive, 00:17:07.880 --> 00:17:10.519 brutalist statement. It just screamed dominance. 00:17:11.019 --> 00:17:14.140 And the Worldport at JFK, that terminal looked 00:17:14.140 --> 00:17:16.380 like a flying saucer had landed. It had that 00:17:16.380 --> 00:17:18.460 incredible elliptical roof that hung out over 00:17:18.460 --> 00:17:20.380 the airplane so passengers wouldn't get wet when 00:17:20.380 --> 00:17:23.519 they boarded. It was pure space age optimism. 00:17:24.220 --> 00:17:26.900 Speaking of the space age, we can't ignore the 00:17:26.900 --> 00:17:29.750 pop culture. It was everywhere. When the Beatles 00:17:29.750 --> 00:17:32.750 came to America in 64, they stepped off a Pan 00:17:32.750 --> 00:17:35.549 Am jet, the Clipper defiance. When James Bond 00:17:35.549 --> 00:17:38.750 flies to Jamaica in Dr. No, he flies Pan Am. 00:17:38.809 --> 00:17:41.430 He flies it again in Live and Let Die. And then 00:17:41.430 --> 00:17:44.589 there's Stanley Kubrick's 2001, A Space Odyssey. 00:17:44.849 --> 00:17:48.650 This is Clipper. The Orion III. Kubrick and his 00:17:48.650 --> 00:17:51.230 writer Arthur C. Clarke. worked directly with 00:17:51.230 --> 00:17:53.230 Pan Am designers to imagine what a commercial 00:17:53.230 --> 00:17:55.109 space plane would look like in the year 2001. 00:17:55.490 --> 00:17:57.849 And it had the blue meatball on the tail. It 00:17:57.849 --> 00:18:00.190 just felt inevitable. It felt so inevitable that 00:18:00.190 --> 00:18:02.690 Pan Am actually started a waiting list for flights 00:18:02.690 --> 00:18:05.289 to the moon. The first moon flights club. It's 00:18:05.289 --> 00:18:08.069 incredible. It started as a bit of a joke. A 00:18:08.069 --> 00:18:09.910 journalist from Vienna called and asked to make 00:18:09.910 --> 00:18:12.009 a reservation, but Pan Am just leaned into it 00:18:12.009 --> 00:18:13.990 completely. They printed up and issued membership 00:18:13.990 --> 00:18:16.630 cards. And how many people signed up? Over 93 00:18:16.630 --> 00:18:18.950 ,000 people signed up. They were telling people, 00:18:19.089 --> 00:18:22.049 expect departure around the year 2000. Yeah. 00:18:22.170 --> 00:18:24.190 There's even a psychological term, the Pan Am 00:18:24.190 --> 00:18:26.990 smile, for a fake perfunctory smile that came 00:18:26.990 --> 00:18:29.519 from their TV commercials. That optimism is just, 00:18:29.579 --> 00:18:32.259 it's heartbreaking in retrospect. Because while 00:18:32.259 --> 00:18:34.440 they were dreaming of the moon in the late 60s, 00:18:34.440 --> 00:18:36.480 the seeds of their destruction were already being 00:18:36.480 --> 00:18:39.420 planted right here on Earth. The descent begins 00:18:39.420 --> 00:18:42.359 almost at the exact moment the 747 enters service. 00:18:42.519 --> 00:18:44.819 It's a classic case of just terrible, terrible 00:18:44.819 --> 00:18:48.279 timing. So 1970, the 747 starts flying. It's 00:18:48.279 --> 00:18:51.460 huge, it's beautiful, but it has a lot of seats 00:18:51.460 --> 00:18:54.619 to fill. A lot of seats. And then 1973 hits. 00:18:55.480 --> 00:18:58.319 The OPEC oil prices. The embargo. They turn off 00:18:58.319 --> 00:19:01.500 the tap. Fuel prices don't just go up. They quadruple 00:19:01.500 --> 00:19:03.779 almost overnight. Yeah. And at the exact same 00:19:03.779 --> 00:19:06.299 time, the global economy goes into a deep recession. 00:19:06.480 --> 00:19:09.599 So suddenly. Pan Am has this brand new fleet 00:19:09.599 --> 00:19:12.279 of massive planes that gulp fuel like crazy. 00:19:12.339 --> 00:19:13.799 And people stop traveling because they can't 00:19:13.799 --> 00:19:15.599 afford it. Exactly. So they are flying these 00:19:15.599 --> 00:19:18.519 gigantic half -empty 747s across the Atlantic. 00:19:18.619 --> 00:19:20.980 They were flying aluminum balloons. And this 00:19:20.980 --> 00:19:23.579 exposed the fundamental fatal flaw in Pan Am's 00:19:23.579 --> 00:19:25.700 corporate structure. We need to talk about the 00:19:25.700 --> 00:19:27.900 domestic hole. This is the technical part that 00:19:27.900 --> 00:19:30.099 I really want to understand. Because to the layman, 00:19:30.359 --> 00:19:34.049 Pan Am looked huge. They flew everywhere. Why 00:19:34.049 --> 00:19:36.349 did not having domestic routes end up killing 00:19:36.349 --> 00:19:38.569 them? Okay, think of an airline network like 00:19:38.569 --> 00:19:42.930 a funnel. To fill a massive 400 -seat 747 flying 00:19:42.930 --> 00:19:45.470 from New York to London, you need to gather people 00:19:45.470 --> 00:19:47.950 from all over the United States. You need someone 00:19:47.950 --> 00:19:50.009 coming from Cleveland, someone from St. Louis, 00:19:50.170 --> 00:19:52.730 someone from Nashville, all flying into JFK to 00:19:52.730 --> 00:19:54.890 get on that one big plane. Right. You need feeder 00:19:54.890 --> 00:19:57.369 traffic. You need feeder traffic. But Pan Am 00:19:57.369 --> 00:19:59.779 didn't have those flights. Because of the old 00:19:59.779 --> 00:20:02.319 regulations, they were only allowed to fly internationally, 00:20:02.539 --> 00:20:04.460 with a few exceptions like Hawaii and Alaska. 00:20:04.819 --> 00:20:06.579 So if you lived in St. Louis and wanted to fly 00:20:06.579 --> 00:20:08.859 Pan Am to London, you first had to buy a ticket 00:20:08.859 --> 00:20:11.740 on TWA or United to get you to New York. You 00:20:11.740 --> 00:20:13.559 had to change airlines. You had to change airlines, 00:20:13.799 --> 00:20:15.740 probably change terminals, recheck your bags. 00:20:15.859 --> 00:20:18.740 It was a huge hassle. But for a long time, it 00:20:18.740 --> 00:20:21.019 worked because Pan Am was the main and sometimes 00:20:21.019 --> 00:20:24.099 only option across the ocean. But then came 1978. 00:20:25.069 --> 00:20:27.769 deregulation. The Airline Deregulation Act. President 00:20:27.769 --> 00:20:30.049 Carter signs it into law and the gloves come 00:20:30.049 --> 00:20:32.910 off. The government basically just removed all 00:20:32.910 --> 00:20:35.390 the restrictions on where airlines could fly. 00:20:35.589 --> 00:20:38.569 That's right. Suddenly, domestic airlines like 00:20:38.569 --> 00:20:41.490 United, American and Delta were allowed to start 00:20:41.490 --> 00:20:43.529 flying internationally. And they had the funnel. 00:20:43.690 --> 00:20:46.230 They had the funnel. United could now fly you 00:20:46.230 --> 00:20:49.009 from St. Louis to New York on a United plane. 00:20:49.549 --> 00:20:51.630 And then you just walk down the hall and get 00:20:51.630 --> 00:20:53.950 on a United flight to London. They could price 00:20:53.950 --> 00:20:55.890 the whole ticket cheaper. They could keep your 00:20:55.890 --> 00:20:58.430 bags in their system. They controlled the passenger 00:20:58.430 --> 00:21:01.049 from their doorstep all the way to the destination. 00:21:01.390 --> 00:21:04.089 And Pan Am was left stranded at the International 00:21:04.089 --> 00:21:08.029 Gateway at JFK or Miami, just waiting for passengers 00:21:08.029 --> 00:21:10.190 that weren't showing up anymore. Their feed traffic 00:21:10.190 --> 00:21:11.869 just dried up. Their competitors were eating 00:21:11.869 --> 00:21:14.589 their lunch. Pan Am was an airline without a 00:21:14.589 --> 00:21:17.619 country. It had no domestic base to support its 00:21:17.619 --> 00:21:20.299 massive international ambitions. So they tried 00:21:20.299 --> 00:21:22.220 to fix it. I mean, they knew this was a problem. 00:21:22.299 --> 00:21:24.559 And their solution was the merger with National 00:21:24.559 --> 00:21:27.799 Airlines in 1980. And this is often cited as 00:21:27.799 --> 00:21:29.940 one of the worst, if not the worst, merger in 00:21:29.940 --> 00:21:32.400 corporate history. So what was the logic? Pan 00:21:32.400 --> 00:21:35.319 Am bought National Airlines specifically to get 00:21:35.319 --> 00:21:37.740 their domestic route network. On paper, it makes 00:21:37.740 --> 00:21:39.779 perfect sense. You need domestic routes, you 00:21:39.779 --> 00:21:42.119 go out and buy a domestic airline. But the execution 00:21:42.119 --> 00:21:45.140 was a catastrophe. A total catastrophe. First, 00:21:45.319 --> 00:21:48.200 they massively overpaid. There was a bidding 00:21:48.200 --> 00:21:51.119 war with Frank Lorenzo at Texas Air, and Pan 00:21:51.119 --> 00:21:54.319 Am panicked and ended up paying $437 million, 00:21:54.759 --> 00:21:56.900 far more than it was worth. They panicked about 00:21:56.900 --> 00:21:59.180 it. And the famous culture clash? Oil and water. 00:21:59.339 --> 00:22:02.599 Pan Am was. It was aristocratic. Their pilots 00:22:02.599 --> 00:22:05.720 saw themselves as the gods of the sky. They flew 00:22:05.720 --> 00:22:09.319 747s to Tokyo and Paris. National Airlines was 00:22:09.319 --> 00:22:12.019 a scrappy, no -frills, mostly regional carrier 00:22:12.019 --> 00:22:14.859 based in Florida. They flew shorter hops, mainly 00:22:14.859 --> 00:22:16.920 up and down the East Coast. I can just imagine 00:22:16.920 --> 00:22:18.960 the friction in the crew rooms. It was toxic. 00:22:19.200 --> 00:22:21.779 And the labor costs just exploded. To get the 00:22:21.779 --> 00:22:23.960 different unions to agree to the merger, Pan 00:22:23.960 --> 00:22:26.339 Am basically had to agree to bump everyone's 00:22:26.339 --> 00:22:28.819 pay up to the highest level across both companies. 00:22:29.259 --> 00:22:31.200 So suddenly, they were paying National Airlines 00:22:31.200 --> 00:22:34.599 staff these premium Pan Am wages. The costs went 00:22:34.599 --> 00:22:36.200 right through the roof, but the revenue didn't 00:22:36.200 --> 00:22:37.859 follow. And National didn't even have the right 00:22:37.859 --> 00:22:40.720 routes, did it? No. That was the other killer. 00:22:41.119 --> 00:22:43.740 National flew mostly north -south along the East 00:22:43.740 --> 00:22:46.500 Coast. New York to Miami was their big route. 00:22:46.960 --> 00:22:49.779 Pan Am needed east -west traffic from the Midwest 00:22:49.779 --> 00:22:53.299 to feed its Atlantic hub at JFK, and it needed 00:22:53.299 --> 00:22:55.640 a West Coast presence to feed what was left of 00:22:55.640 --> 00:22:57.720 its Pacific routes. It was a complete strategic 00:22:57.720 --> 00:23:01.220 mismatch. So they are bleeding money. The 747s 00:23:01.220 --> 00:23:03.920 are still half empty. The merger is a bust. And 00:23:03.920 --> 00:23:06.299 now begins the really sad phase of the story, 00:23:06.400 --> 00:23:09.339 selling the silverware. To stay alive, they started 00:23:09.339 --> 00:23:12.019 liquidating their most valuable assets. And they 00:23:12.019 --> 00:23:14.220 had some great assets. They sold the Pan Am building 00:23:14.220 --> 00:23:17.980 in New York to MetLife for $400 million. That 00:23:17.980 --> 00:23:20.299 iconic building in the middle of Manhattan just... 00:23:20.650 --> 00:23:22.730 Gone. They sold the intercontinental hotel chain 00:23:22.730 --> 00:23:24.650 they had built from scratch. But the one that 00:23:24.650 --> 00:23:26.910 really signaled the end, the one that made everyone 00:23:26.910 --> 00:23:29.170 in the aviation world just gasp, was in 1985. 00:23:29.289 --> 00:23:31.650 They sold the entire Pacific Division to United 00:23:31.650 --> 00:23:34.150 Airlines. The Pacific, the ocean they pioneered, 00:23:34.190 --> 00:23:36.849 the legacy of the China Clipper and the SS North 00:23:36.849 --> 00:23:39.769 Haven, they sold it. Lock, stock, and barrel. 00:23:40.289 --> 00:23:42.869 They sold the routes, the invaluable landing 00:23:42.869 --> 00:23:45.650 rights in Tokyo, and the planes, including their 00:23:45.650 --> 00:23:50.119 fleet of specialized long -range 747 SPs. United 00:23:50.119 --> 00:23:53.299 paid $750 million for it. It sounds like a lot 00:23:53.299 --> 00:23:55.660 of money at the time. It was a desperate cash 00:23:55.660 --> 00:23:58.420 injection to stop the bleeding. But strategically, 00:23:58.779 --> 00:24:01.339 it was suicide. They cut off one of their two 00:24:01.339 --> 00:24:03.819 main arteries. They effectively became an Atlantic 00:24:03.819 --> 00:24:06.559 -only airline. And by handing the entire Pacific 00:24:06.559 --> 00:24:09.299 network to United, they created a mega competitor 00:24:09.299 --> 00:24:11.519 that would eventually help crush them. So they 00:24:11.519 --> 00:24:13.680 are limping along. They are a shadow of their 00:24:13.680 --> 00:24:16.099 former glorious selves. But they are still flying. 00:24:16.279 --> 00:24:19.509 And then tragedy strikes. December 21st, 1988. 00:24:19.930 --> 00:24:23.289 Lockerbie. Flight 103. A Boeing 747, the clipper 00:24:23.289 --> 00:24:25.450 made of the seas, was destroyed by a terrorist 00:24:25.450 --> 00:24:28.690 bomb over Lockerbie, Scotland. All 259 people 00:24:28.690 --> 00:24:30.670 on board and 11 people on the ground were killed. 00:24:30.829 --> 00:24:32.869 We all remember the human tragedy, which was 00:24:32.869 --> 00:24:35.690 just horrific. But from a cold business perspective, 00:24:36.009 --> 00:24:38.150 what did this do to the airline? It destroyed 00:24:38.150 --> 00:24:41.589 the brand's most valuable asset, trust. Pan Am 00:24:41.589 --> 00:24:44.470 had always, always marketed itself as the world's 00:24:44.470 --> 00:24:46.869 most experienced airline. That implied safety. 00:24:47.309 --> 00:24:50.269 It implied security. After Lockerbie, passengers 00:24:50.269 --> 00:24:53.029 were terrified to fly Pan Am. And it wasn't just 00:24:53.029 --> 00:24:55.430 the fear of terrorism. It was a revelation that 00:24:55.430 --> 00:24:59.470 Pan Am's own security had been lax. The FAA fined 00:24:59.470 --> 00:25:02.190 them for serious security failures. The families 00:25:02.190 --> 00:25:04.430 of the victims filed a lawsuit for over $300 00:25:04.430 --> 00:25:07.549 million. Major corporate accounts canceled their 00:25:07.549 --> 00:25:10.210 travel contracts overnight. It was a death blow 00:25:10.210 --> 00:25:12.490 to their reputation. The trust was gone. And 00:25:12.490 --> 00:25:14.390 yet they staggered on for another two years. 00:25:14.970 --> 00:25:17.410 But history had one more punch left to throw. 00:25:17.569 --> 00:25:21.490 The Gulf War. August 1990. Saddam Hussein invades 00:25:21.490 --> 00:25:24.730 Kuwait. It's the 1973 oil crisis all over again. 00:25:24.829 --> 00:25:27.609 Exactly. Fuel prices spike. Yeah. Fear of terrorism 00:25:27.609 --> 00:25:29.930 and international travel skyrockets. Transatlantic 00:25:29.930 --> 00:25:32.049 travel dropped by more than 50 % in a matter 00:25:32.049 --> 00:25:34.789 of months. Pan Am had absolutely no cash reserves 00:25:34.789 --> 00:25:37.049 left to weather that kind of storm. So they started 00:25:37.049 --> 00:25:39.630 selling everything that wasn't nailed down. Everything. 00:25:40.049 --> 00:25:42.880 They sold their routes to London Heathrow. the 00:25:42.880 --> 00:25:45.299 crown jewel of transatlantic travel to United. 00:25:46.039 --> 00:25:48.680 Once they sold Heathrow, they were barely a major 00:25:48.680 --> 00:25:51.259 international airline anymore. They sold their 00:25:51.259 --> 00:25:54.240 German routes, the IGS to Lufthansa. Oh, wait, 00:25:54.279 --> 00:25:56.220 we skipped over the IGS. We have to mention this 00:25:56.220 --> 00:25:58.240 because it's such a cool historical quirk. The 00:25:58.240 --> 00:26:01.339 internal German services? Yes. Sorry, we can't 00:26:01.339 --> 00:26:03.940 leave that out. It's fascinating. For most of 00:26:03.940 --> 00:26:06.319 the Cold War, Pan Am was basically the domestic 00:26:06.319 --> 00:26:09.109 airline of West Germany. Because German airlines 00:26:09.109 --> 00:26:11.390 like Lufthansa couldn't fly into West Berlin, 00:26:11.450 --> 00:26:13.269 right? Correct. Under the post -World War II 00:26:13.269 --> 00:26:15.930 occupation rules, only Allied nation planes, 00:26:16.029 --> 00:26:18.750 so U .S., U .K., and French, could fly through 00:26:18.750 --> 00:26:21.329 the air corridors into West Berlin. So Pan Am 00:26:21.329 --> 00:26:23.930 operated a massive and very profitable shuttle 00:26:23.930 --> 00:26:26.309 network connecting West Berlin to cities like 00:26:26.309 --> 00:26:28.690 Frankfurt, Hamburg, and Munich. And these weren't 00:26:28.690 --> 00:26:30.730 normal flights. They were flying over East German 00:26:30.730 --> 00:26:33.180 territory. No, they were flying through these 00:26:33.180 --> 00:26:36.180 three very narrow air corridors. It was tightly 00:26:36.180 --> 00:26:38.900 controlled airspace. If you deviated from the 00:26:38.900 --> 00:26:41.500 path, Soviet MiG fighters would intercept you. 00:26:42.140 --> 00:26:44.740 Pan Am pilots flew these routes at low altitude, 00:26:45.039 --> 00:26:47.559 sometimes under visual flight rules. It was high 00:26:47.559 --> 00:26:49.680 -stress, high -frequency flying. And very profitable. 00:26:49.940 --> 00:26:53.140 It was a cash cow for decades. And Pan Am employed 00:26:53.140 --> 00:26:55.480 local German flight attendants. It was this really 00:26:55.480 --> 00:26:58.279 unique subculture within the airline. But in 00:26:58.279 --> 00:27:01.000 1990... With the Berlin Wall down and the company 00:27:01.000 --> 00:27:03.920 dying, they sold that whole operation, too, to 00:27:03.920 --> 00:27:07.319 Lufthansa. So we get to January 1991. Pan Am 00:27:07.319 --> 00:27:10.400 files for bankruptcy, but they keep flying. They're 00:27:10.400 --> 00:27:12.859 in Chapter 11 bankruptcy protection. Right. And 00:27:12.859 --> 00:27:15.400 Delta Airlines steps in. They provide funding. 00:27:15.460 --> 00:27:17.779 It's called debtor in possession financing to 00:27:17.779 --> 00:27:19.779 keep Pan Am operating while they negotiate to 00:27:19.779 --> 00:27:21.559 buy the remaining good assets. And there was 00:27:21.559 --> 00:27:23.960 a plan for a new Pan Am, right? A smaller, leaner 00:27:23.960 --> 00:27:27.099 version. The idea was to shrink Pan Am down to 00:27:27.099 --> 00:27:29.339 just a Miami -based carrier serving Latin America 00:27:29.339 --> 00:27:31.740 and the Caribbean. Sort of bring it back to its 00:27:31.740 --> 00:27:34.559 roots. Delta would buy most of the European routes 00:27:34.559 --> 00:27:37.019 and the Pan Am shuttle. And in return, they'd 00:27:37.019 --> 00:27:40.440 own 45 percent of this new, smaller Pan Am. But 00:27:40.440 --> 00:27:42.420 the numbers just didn't work. And they're losing 00:27:42.420 --> 00:27:45.039 $3 million a day. The advance bookings for the 00:27:45.039 --> 00:27:47.339 holiday season were terrible. And on December 00:27:47.339 --> 00:27:50.420 3rd, 1991, Delta's board of directors looked 00:27:50.420 --> 00:27:52.700 at the spreadsheet and just said, no more. We're 00:27:52.700 --> 00:27:54.400 not putting another dollar in. They pulled the 00:27:54.400 --> 00:27:57.940 plug. December 4th. The call goes out from the 00:27:57.940 --> 00:28:00.119 headquarters in the Pan Am building in New York. 00:28:00.619 --> 00:28:03.519 Shut it down. And it was immediate. Immediate. 00:28:03.579 --> 00:28:07.559 7 ,500 employees lost their jobs instantly. There 00:28:07.559 --> 00:28:09.539 are these heartbreaking stories from that day 00:28:09.539 --> 00:28:11.799 of pilots taxing their planes out to the runway, 00:28:11.980 --> 00:28:13.880 getting the call from the control tower, and 00:28:13.880 --> 00:28:15.619 having to turn the plane around, go back to the 00:28:15.619 --> 00:28:17.720 gate, and tell the passengers to get off because 00:28:17.720 --> 00:28:20.339 the airline no longer exists. What about the 00:28:20.339 --> 00:28:23.119 final flight? The final flight was Clipper Goodwill. 00:28:23.549 --> 00:28:26.730 Pan Am Flight 436. It was already in the air, 00:28:26.769 --> 00:28:29.829 flying from Barbados to Miami. It landed in Miami 00:28:29.829 --> 00:28:32.650 late that afternoon. The airport fire trucks 00:28:32.650 --> 00:28:34.990 gave it a water cannon salute as it taxied to 00:28:34.990 --> 00:28:37.230 the gate. The captain shut down the engines, 00:28:37.390 --> 00:28:40.849 and that was it. The blue meatball stopped spinning. 00:28:41.130 --> 00:28:45.230 It's such a definitive sudden end, but it didn't 00:28:45.230 --> 00:28:48.670 stay dead. Not entirely. This is the afterlife 00:28:48.670 --> 00:28:51.430 section of our deep dive, and frankly... It gets 00:28:51.430 --> 00:28:54.069 a little weird. It gets very weird. The brand 00:28:54.069 --> 00:28:57.089 itself was just too powerful, too iconic to disappear 00:28:57.089 --> 00:28:59.390 completely into the history books. Became what 00:28:59.390 --> 00:29:01.230 you call a zombie brand. It's been resurrected, 00:29:01.289 --> 00:29:04.089 what, five or six times now? At least. In the 00:29:04.089 --> 00:29:06.349 late 90s, a group of investors bought the rights 00:29:06.349 --> 00:29:08.690 and started a low -cost carrier called Pan Am 00:29:08.690 --> 00:29:11.380 2. Failed pretty quickly. Then there was Pan 00:29:11.380 --> 00:29:13.980 Am Third, which was a tiny regional airline based 00:29:13.980 --> 00:29:16.220 in New Hampshire. And the railway. This is the 00:29:16.220 --> 00:29:18.079 strangest one. I was driving in New England a 00:29:18.079 --> 00:29:20.619 few years ago and I saw a boxcar on a freight 00:29:20.619 --> 00:29:22.839 train with the Pan Am logo on it. I honestly 00:29:22.839 --> 00:29:25.039 thought I was hallucinating. No, you saw it right. 00:29:25.119 --> 00:29:27.559 A company called Guilford Transportation Industries 00:29:27.559 --> 00:29:31.099 bought the brand and renamed their entire railroad 00:29:31.099 --> 00:29:36.200 Pan Am Railways. So for about 20 years, Pan Am 00:29:36.200 --> 00:29:38.700 was a train company that mostly hauled lumber 00:29:38.700 --> 00:29:41.779 and paper pulp. That is just bizarre. It feels 00:29:41.779 --> 00:29:45.140 wrong. It is. And today it's mostly a licensing 00:29:45.140 --> 00:29:47.700 play. You can buy Pan Am branded luggage, Pan 00:29:47.700 --> 00:29:51.000 Am watches. There's a flagship Pan Am apparel 00:29:51.000 --> 00:29:54.940 store in Seoul, South Korea, of all places. And 00:29:54.940 --> 00:29:57.500 the notes mention a potential comeback in 2025. 00:29:57.779 --> 00:30:00.680 Is that serious? Well, a group called Pan Am 00:30:00.680 --> 00:30:03.559 Global Holdings now owns the name. They recently 00:30:03.559 --> 00:30:05.680 ran a one -off commemorative charter flight across 00:30:05.680 --> 00:30:08.779 the Atlantic using a Boeing 757. They claim they 00:30:08.779 --> 00:30:10.819 want to restart scheduled service. I feel like 00:30:10.819 --> 00:30:12.700 at this point it's just nostalgia farming. It 00:30:12.700 --> 00:30:15.559 can never be the same. You can't recreate the 00:30:15.559 --> 00:30:17.440 original Pan Am because the world that created 00:30:17.440 --> 00:30:19.660 it, the world of the chosen instrument, of government 00:30:19.660 --> 00:30:21.980 -backed monopolies, of pioneering new technologies, 00:30:22.240 --> 00:30:25.079 that world doesn't exist anymore. That's the 00:30:25.079 --> 00:30:27.160 key takeaway, isn't it? Pan Am was a creature 00:30:27.160 --> 00:30:29.920 of its time. It was. It was a brilliant engineering 00:30:29.920 --> 00:30:32.859 company and a powerful political entity that 00:30:32.859 --> 00:30:37.640 tried and failed to survive in a ruthless, deregulated 00:30:37.640 --> 00:30:40.880 marketplace. It failed as a business, but it 00:30:40.880 --> 00:30:43.359 absolutely succeeded as a pioneer. They invented 00:30:43.359 --> 00:30:46.099 the concept of economy class. They invented the 00:30:46.099 --> 00:30:48.599 idea of an airline having its own hotel chain. 00:30:48.819 --> 00:30:52.140 They pushed Boeing to build the 747, the plane 00:30:52.140 --> 00:30:54.359 that made global travel affordable for millions. 00:30:54.640 --> 00:30:56.740 It made the world smaller. That's the ultimate 00:30:56.740 --> 00:30:59.579 legacy. Before Pan Am, the oceans were barriers. 00:30:59.839 --> 00:31:02.220 After Pan Am, they were just time zones you crossed. 00:31:02.700 --> 00:31:04.240 I want to leave our listeners with a thought 00:31:04.240 --> 00:31:05.819 that really struck me while reading about the 00:31:05.819 --> 00:31:08.180 Moon Club. Pan Am was taking reservations for 00:31:08.180 --> 00:31:11.539 commercial lunar flights in the 1960s. They saw 00:31:11.539 --> 00:31:13.460 themselves as the company that would take humanity 00:31:13.460 --> 00:31:15.960 to the stars. And today? Today we have private 00:31:15.960 --> 00:31:18.339 companies like SpaceX and Blue Origin pushing 00:31:18.339 --> 00:31:21.380 that frontier. And I just wonder, is the spirit 00:31:21.380 --> 00:31:24.019 of Pan Am truly dead or has it just moved? Are 00:31:24.019 --> 00:31:26.339 Elon Musk and Jeff Bezos the new one -trippers? 00:31:26.559 --> 00:31:29.920 It's a very valid comparison. You have massive 00:31:29.920 --> 00:31:33.200 egos, massive political connections, and a willingness 00:31:33.200 --> 00:31:36.359 to burn billions and billions of dollars to do 00:31:36.359 --> 00:31:38.519 something that seems impossible. It's something 00:31:38.519 --> 00:31:40.339 to chew on next time you look up at the night 00:31:40.339 --> 00:31:43.740 sky. Or maybe the next time you're squeezed into 00:31:43.740 --> 00:31:45.819 an economy class seat on a flight that costs 00:31:45.819 --> 00:31:48.440 less than a good pair of shoes. You can thank 00:31:48.440 --> 00:31:51.299 Pan Am for both the ability to go and maybe for 00:31:51.299 --> 00:31:53.779 the lack of legroom. A fair trade, I suppose, 00:31:54.019 --> 00:31:56.339 in the end. Thanks for diving deep with us today 00:31:56.339 --> 00:31:58.500 on the incredible life and death of the blue 00:31:58.500 --> 00:31:59.680 meatball. Safe travels.