Ups and Downs of Business

8/12/2019 Ups and Downs of Business

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UPS AND DOWNS IN BUSINESS

The Pan Am most of us knew was born on 28 October 1927 ,when it began scheduled mail service between Key West andHavana.

Passenger service started on 16 January 1928 . 16 September 1928 As Peruvian Airways already existed, Trippe

purchased half interest in it and on 28 November,1928acquired the Peruvian air.

On 25 January 1929 , Pan American-Grace Corporation(Panagra) was formed.

On 15 May 1929 , Panagra started its own service with a leasedS-38 from Pan American

On 21 July 1929 , the route was extended to Santiago On 12 October 1929 , a Panagra Ford Tri-Motor made the first

commercial flight across the Andes, reaching an altitude of18,000 feet (5,486 meters) and establishing a mail routebetween Santiago and Buenos Aires.


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The route extended some 4,200 miles and what isoften overlooked is that the flying distance itrepresented was virtually unheard of during that

time. In less than a year from its inception. Panagra had linked Panama, Colombia, Ecuador,

Peru, Chile, Argentina and Uruguay with the UnitedStates.

No domestic airline in the US had even managedto span the country, yet, with this route


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During 1930 , the Colombian airline SCADTA (nowAVIANCA), and NYRBA (New York, Rio, & BuenosAires Airline) were acquired (bringing many

qualified personnel, nearly 30 almost new multi-engined planes, and the Panair Do Brasil subsidiary). Finally, it was Trippe's backing of the flying boat, the

first Pan Am Flying Clippers, that pioneered globalroutes: 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 trulyglobal.


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In 1931 , Sikorsky S-40, four-engined flying boats (the firstClippers) opened a new route to Colombia, viaJamaica, and to Panama. Also Completed a system-wide radio network, and equipped all aircraft with two-way radio.

In 1932 , new subsidiaries were opened in Alaska andCuba (Pacific Alaska Airways and Cubana).

In 1933 , Panagra was the first to install radio and weather

stations in the Andes between Chile and Argentina In 1935 , the China Clipper opened trans-Pacific

schedules to Manila, Electras opened new schedules inAlaska and Cuba, and DC-2s came to CNAC.


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In 1937 Sikorsky S-42Bs surveyed the Atlantic routes, andopened Bermuda service from New York and Baltimore.

In 1939 , Boeing 314 Clippers entered Pacific service andopened Atlantic schedules to Europe

In 1945 other airlines didn't think or act that way. Trippedecided to introduce a "tourist class" fare from New York toLondon

On 17 June 1947 , Juan Trippe realized perhaps his greatestdream, by opening new Round-the-World schedules.

In 1952 , it was first to introduce DC-6Bs and inaugurate tourist-class services in South America.

In 1954 , it was first to use the latest airborne weather radar inregularly scheduled service.

In 1955 , it was first to introduce DC-7B service between the USand Argentina. Panagra was also first to introduce the DC-8 toSouth America.


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In 1950s Its El Pacifico tourist service and ElInteramericano first class service were the staplefor travel from the United States to cities such as

Guayaquil, Lima, Antofagasta, Santiago andBuenos Aires. By the mid-1950s , major expansions were over, and

efforts were concentrated on superior service andeconomy fares, while cargo services wereimproved and expanded.


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He cut the round-trip fare more than half, to $275 ($1,684in today's dollars, which makes current pricing a bargain,right?). This went over like a lead balloon in the industry,where air fares were fixed by a cartel, the International

Air Transport Association; it didn't want to hear about thetourist class. Incredibly, Britain closed its airports to PanAm flights that had tourist seats. Pan Am was forced toswitch to remote Shannon, Ireland. The industry'saversion to competition and making travel affordablewas to have a long life, as Sir Freddie Laker woulddiscover in the 1970s and Virgin Atlantic nearly adecade later.


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Trippe managed to find one route where the cartelcould not thwart him: New York to San Juan, PuertoRico. Pan Am's one-way fare was $75, and the

flights were packed. Finally, in 1952, Trippe'srelentless attacks on the I.A.T.A. forced all airlines toaccept the inevitability of tourist class. But by thenhis vision had taken off for its next destination.

In October 1958, a Pan Am Boeing 707 left New Yorkfor its first scheduled flight to Paris.


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By the 1960s Braniff was in negotiations to acquirethe 50% interest of W. R Grace and in December1965 , a deal was made to purchase these shares.

On 17 March 1966 , the remaining 50% interest wasacquired from Pan American. In July 1966 , theacquisition was approved by the US CivilAeronautics Board and by February 1967 ,Panagras operations were fully integrated intoBraniff.


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Sadly, the 747 also sank Pan Am. Trippe bought too many 747s in the early 1970s . A world

oil crisis hit airline travel hard, and his business neverrecovered. Boeing itself almost went belly-up because ofthe cost of launching the 747.

The 1970 s soon brought major increases in worldwidefuel prices, and declining travel. followed byderegulation and huge increases in competition.Despite Pan Am's being a leader in low operating costs,

deficits grew. The magic era ended with the passing on of Juan Trippe

in 1981 , and a succession of managements were unableto regain profitability.


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REFERENCES

The Pan Am Series Part XXII: The Boeing 747 http://jpbtransconsulting.com/tag/juan-trippe/ JUAN TRIPPE: Pilot Of The Jet Age -

TIME http://content.time.com/time/magazine/article/0,9171,989780,00.html#ixzz2tbmobSiO

http://www.panam.org/about-pahf/a-brief-history-of-pan-am.html
http://jpbtransconsulting.com/2014/01/18/the-pan-am-series-part-xxii-the-boeing-747/http://jpbtransconsulting.com/2014/01/18/the-pan-am-series-part-xxii-the-boeing-747/http://jpbtransconsulting.com/2014/01/18/the-pan-am-series-part-xxii-the-boeing-747/http://jpbtransconsulting.com/tag/juan-trippe/http://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://www.panam.org/about-pahf/a-brief-history-of-pan-am.htmlhttp://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://content.time.com/time/magazine/article/0,9171,989780,00.htmlhttp://jpbtransconsulting.com/tag/juan-trippe/http://jpbtransconsulting.com/tag/juan-trippe/http://jpbtransconsulting.com/tag/juan-trippe/http://jpbtransconsulting.com/tag/juan-trippe/http://jpbtransconsulting.com/2014/01/18/the-pan-am-series-part-xxii-the-boeing-747/http://jpbtransconsulting.com/2014/01/18/the-pan-am-series-part-xxii-the-boeing-747/http://jpbtransconsulting.com/2014/01/18/the-pan-am-series-part-xxii-the-boeing-747/http://jpbtransconsulting.com/2014/01/18/the-pan-am-series-part-xxii-the-boeing-747/http://jpbtransconsulting.com/2014/01/18/the-pan-am-series-part-xxii-the-boeing-747/http://jpbtransconsulting.com/2014/01/18/the-pan-am-series-part-xxii-the-boeing-747/


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On 22 December 1965, Juan Trippe and Bill Allen signed a Letter ofIntent for the Boeing 747. On 13 April 1966, Pan American formallyordered twenty-five airplanes. But before the April agreement, ahuge obstacle arose:

On 30 March, President Johnson invited the Business Council to adinner. Both Juan Trippe and Bill Allen were in attendance. During thedinner Johnson pleaded for austerity due to economic problemscaused by the war in Southeast Asia. This jolted both Trippe andAllen, whose 747 project was not exactly austere.

Was the project in jeopardy? After the dinner, Trippe, who had

previously no success in having a personal meeting with Johnson,approached him to press his case. Johnson asked Trippe if anyoneknew about the project and Trippe said no, except for BillAllen. Johnson then asked Trippe to be at the White House the nextday to see someone.

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Ups and Downs of Business