Saving Pan Am

This is a crosspost from an airliner forum I also frequent that started off fairly short but turned into the better part of a fleshed out TL. I though it might interest people here, and I'd like to here people's thoughts on its realism or lack theoreofe :p in any case. The basic question was what Pan Am might look like today had it survived deregulation, and I presented this as a possibility that allows it to survive in a form that is recognizably in the spirit of the airline Juan Trippe created. In any case, everything below is pretty much copied as is from the middle of the discussion at the other forum.

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The basic question to ask is what you would change to get the airline to survive, and as a lot of people have said it's a tall order. My inclination is that they probably had a decent chance of survival with GOOD management and planning combined with decent foresight at least until they bought National... After the merger it really was all over. I've also gotta think that almost no matter what there is going to have to be a chapter 11 process at some point in the 80s or 90s to sort out the union problems they had, and getting an outcome good enough to save the company here is the hardest thing. Nontheless I love alternate history, so I'll make a suggestion as to how I might approach trying to save the company (and doing it in a way that gets an airline something like "the airline of Juan Trippe"). No explanation given for where you might find the management team willing to take this approach, but that's a problem I really don't even want to begin addressing this late at night.

I'm not sure about what dates the 707s entered and exited the fleet en masse, but I would definitely agree that the 747 purchase (while not NECESSARILY fatal) was one hell of a cock up. While regulation remains in place the airline is committed to low frequencies and does have limited competition so I wouldn't cancel the order completely, especially with the range advantages they had at the time, but certainly no more than 25 aircraft, and probably fewer. I'd suggest that this could well be justified by a company that also goes ahead with buying about a dozen Concordes as a preliminary to the expected SST takeover (if I was writing this as a fully fleshed out piece for alternatehistory.com I'd explain the logic in more detail, but I think I might justify this by having an airline that was just a bit more progressive historically, jumping, for example, on the Comet and Britannia when given the chance). Even Concorde as it was built, and certainly as a second group of aircraft would have been would have allowed a service at LEAST from the west coast to Hawaii and on to Australia and New Zealand via Fiji, as well as Asia via Guam or Anchorage (the Anchorage Tokyo leg is theoretically in range, but problematic, especially as the aircraft were delivered as well as the reality that while over the ocean a supersonic route up the US coast is likely to prove controversial). A round the world flight might even be possible depending on Australia's cooperation with overflight of the outback, but this would unquestionably be a prestige route, and certainly doomed long term.

Realistically the inevitable Concorde operations on the Atlantic probably just make the aircraft's finances even worse between the three operators, but the Pacific, particularly West Coast to Hawaii and West Coast to Japan has potential to do reasonably well financially (by the standards of Concorde that is). It is an interesting thought that even one more operator (and a significantly larger number of frames given Pan Ams potential routes), combined with opening up the Pacific could well result in a few more Concordes being sold to airlines feeling less able to ignore the Concorde as a purely prestige based project. I could well see some of Lufthansa, Qantas, JAL, Branniff (along with the other American majors, but this is the one that came closest in the real world) and Singapore getting a few frames at least for a while (and more outlandishly some smaller companies might carry through, thinking things like Iranian, Canadian Pacific (interesting potential for a YVR-YFB-LHR/AMS route here), South African and Air India here) but that's really out of the scope of what I'm writing here.

In any case, the major change that fewer 747s leads to is more 707s staying in service longer. While there are going to be more L1011s ordered to fill some of the gaps of a smaller fleet my approach to fleet planning in the late 60s and early 70s would be to provide the capacity routes actually demand, irrespective of the apparent prestige of the aircraft. Heading toward deregulation and greater competition I would want to put a lot of pressure on Boeing to launch the 707-700 (CFM56 re-engining program which flew a prototype in 1979 but was cancelled for lack of interest and potential in house competition with the 757) and combine the re-engining with a complete overhaul of the 707 fleet. The idea would be a more concerted brand re-launch around the time the new livery was introduced, with a first and business class product very much designed to be in keeping with Pan Am's traditional image (as in a damn good premium product); coach marketing would really just be about avoiding the image of ragged twenty something aircraft for a few more years. I'm not sure how difficult Boeing really would be to convince to re-engine 707s, but if some part of the negotiations included an early commitment to launch the 757 this would fit very well into the airline's fleet plan IMO even pre ETOPS.

On deregulation Pan Am is still left with all the problems as in reality, and doesn't necessarily have a whole lot more in the way of liquid assets available given that there has still been a lot of fleet investment, but the over capacity of the network is less pronounced, and with some luck the overall product is on the way to being rejuvenated. An early move into the package vacation market with an emphasis on "exotic" Asian and Middle Eastern destinations would seem a good move given the ownership of InterContinental Hotels and the need to fill seats while the network is reworked to handle the new competition. While the hotels were sold around this time that looks like a big mistake to me given the potential uses of the chain; there are other assets to sell first, and hopefully without buying National at such an inflated price the need to be dumping major parts of the company can be largely averted. As soon as price controls are removed I would have the airline launch a discount coach project. I see this as a response to a realization that the company has no domestic linkages, growing competition and over capacity for even the regulated market; this could also be a decent opportunity to start looking at concessions from the unions, although that opens up the ugly prospect of repeated and extended strike actions.

In any case, while Pan Am very clearly needs a domestic route network ASAP attempting to purchase one whole would seem to be the single largest mistake the company ever made. While the fleet would be stretched very much to its limits, along with the company's finances if new aircraft are needed I think building a new hub based network from scratch, and initially focussing very tightly on delivering passengers to the existing international gateways at a low price is the way to go. To me this means focussing on the longer routes to larger destinations and operating lower than fully competitive frequencies; essentially limiting destinations to those best able to be served by the wide bodies and 707s for now (thinking something like double daily from the existing hubs to Chicago, Salt Lake, Denver, Dallas, Houston and Atlanta to begin with, as well as more frequencies BETWEEN the hubs and mostly shifting the L1011s (no DC-10s without national, but likely more than in reality given fewer 747s) to domestic service). Given the way deregulation happened SOME airline will need to be purchased to get the operating authority for domestic services (other airlines were given international operating rights years before Pan Am was domestic, partially explaining the desperation for a partner/victim in creating a domestic network). I'd suggest the best approach would be to overpay for a small but well structured company that comes in well under the cost of National but allows Pan Am to start building its own network. Something along the lines of Alaska (bear in mind just how small they were around 1980) would seem promising (and could help bring fresh, well proven, blood into Pan Am management right when it's needed most.

Going forward into deregulation there is going to be a serious need for aircraft to get the domestic network going, especially if something like the Shuttle is also wanted (and I think that Shuttle was one of the few really good moves Pan Am made in this era, though showing up Eastern by also serving Chicago, or even conceivably adding the JFK-MIA and JFK-LAX if aircraft can be found to the shuttle system would seem like options with some decent potential returns). While buying Braniff when it collapses would amount to one over unionised (not exactly an attack on the unions for the record, but there were undoubtedly big labour problems at both companies) basket case picking up another there could well be a good opportunity to get parts of the fleet cheaply and quickly, giving a nice boost to the fledgling Pan Am domestic network.

Farther into the eighties the outcome of my changes starts to get murkier, but I tend to lean against the Airbus widebodies. While I very much see their appeal, and agree that an ETOPS aircraft is needed ASAP without the National fleet being picked up the tri-jets are not in quite as untenable position in the fleet, the 707s are very much in desperate need of replacement between age and fuel prices re-engined or not and more aircraft suitable for domestic service are very much needed. In all ways this leads me to believe that a big order (thinking 80ish, but I would need to look at the historical fleet and network more closely) or 757s would be the perfect route for Pan Am, especially if ETOPS can be achieved quickly. Once the company is looking at 757s I think that there isn't much of a case to be made for A300/310s even if they are available a few years sooner, and Pan Am should be a launch customer for the 767 as well. It's not at all clear to me what narrow body fleet would look like at this point between mergers and miscellaneous acquisitions, particularly in how many 727s, 737s and even DC-9s may have appeared, but the 757 was very much played up as a 727 replacement for American domestic use, and I think Pan Am should take that at face value. While the A320 WAS be the right aircraft for Pan Am if they could have gotten them into service I have a hard time seeing the company come to the decision to order them at this stage alongside 757s and 767s and without having purchased the A300/310s.

Heading into the ETOPS era the state of the company starts to look murkier to me. Assuming my marketing and early fleet changes were successful they are probably on a somewhat better financial footing, though I would expect the Pan Am building got sold more or less as in reality to raise funds for fleet expansion. A lot depends on what aircraft can be had in the early 80s, and how well the domestic network ends up being accepted. There's also the not insignificant issue that the company would be operating distinctly old 707s at least until the 757 appears, and what this would do to both company image and finances given the age and fuel requirements of the aircraft (that said, re-engined DC-8s WERE in domestic US service this long, and the re-engining will make second hand aircraft considerably more valuable for cargo operators). In any case, but the end of the eighties Pan Am is looking at a relatively new fleet of Boeing twins focussed on the 757 domestically and wherever ETOPS will allow it, L1011s filling a good deal of the long range over ocean routes but essentially gone domestically as soon as the 767s appear on the way out in general, an indeterminate number of 747-100s that have caused perennial problems with load factors and are probably still operating some 747SPs in the Pacifc and 737s in the Caribbean. There may or may not also be some sort of Concorde network operating out of JFK, IAD, LAX and SFO with pacific tech stops in ANC, HNL, GUM and NAN.

What happens next has a lot to do with what the financial situation actually is. I grant that there is a distinct possibility that none of this is enough to change things drastically, and that the company collapses more or less as historically. The modified domestic network itself could help or hinder somewhat either way, either allowing more cash reserves to stretch out the inevitable or eating what few resources the company does have but I have no real idea of predicting on the sport how that network would have performed in reality. If the company is fairly strong I could see the airline being an early customer for the 747-400 to dispose of the SPs and 100s without losing the prestige they will probably continue to associate with the type. There would also likely be dissatisfaction with the 757 as a domestic type combined with surprise at its distinctly impressive performance long haul, quite possibly leading to an A320 order very soon after the type enters service, largely sized in response to the performance of the domestic network and how aggressively the company intends to expand it. 777s would be ideal for this network, but I'm not sure whether they would be acquired early, or in large numbers given the likely commitment to 747-400s. Perhaps most likely in my view is that the company struggles on into the nineties with little in the way of resources and a distinctly unclear future, unable to dispose entirely of its older 747s, and possibly not even getting enough 757s and 767s to displace all the L1011s. In this case the historical sell off of chunks of the company seems pretty likely, and my view is that especially with the domestic network upsetting the other carriers there is even less hope for a solution like Pan Am II (edit for non aviation geeks: this refers to the Miami based last ditch reorganization of the airline intended to be supported by Delta and operating only to the Caribbean and South America) working; I could very well see a Braniff like collapse in the works sometime in the 90s.

If the company is still around today they are probably flying a still heavily hub and likely budget oriented domestic network. The premium product may well continue to be on par with other majors, and potentially (though questionable that a strategy launched in 1980 would last that long) with somewhat higher standards than other American majors. The overseas routes seem likely to remain the heart and soul of the company, though they have probably been pruned over the years. Around the world may have lasted longer than historically, and there is a very good possibility that around the world charter packages are offered, but scheduled services won't have made it into the nineties. The domestic routes are either operated largely by 757s with the company constantly trying to find a more economical aircraft, but more likely have been replaced by either A320s or 737NGs (I think that the A320 would be the choice if funds were available early, but given the companies history, especially in this timeline they are very likely to stick with Boeing once the NG is available). If the package vacation program from the 80s worked out (and really it working well is the only way I see the company getting the financial resources to pull off a lot of the other bits of this plan) they are probably a significant charter and vacation operator, and likely still own the InterContinental hotel chain, though it may well have been repositioned into an overall smaller brand focussed more on vacationers and all inclusive resorts than the traditional somewhat luxury/business orientation of the chain. Given the vertical integration here what I WOULDN'T expect to see is anything like Pan Am flying charters for cruise ships in the Caribean given that they would be a direct competitor in their own right (though I could almost see Pan Am branded ships (problematic in terms of anti trust laws in the US) or a direct partnership with a cruise operator between Pan Am and someone like Carnival if the airlines finances are VERY good).

There probably are some 747 floating around the network, by now I would expect them to be an all or mostly economy configuration except potentially on a few direct transpacific routes funds are never founds for 777s. The scheduled system would seem likely to be very 757 heavy with a smattering of 767s to Europe and South America and a reasonably high percentage of 777s in the Pacific (I would expect more 767s and some 747s in the Pacific rather than 777s if the airline doesn't perform well from about 1988-1998). African service is probably largely gone except for South Africa (which is quite possibly routed through western Europe) and Middle East destinations are an open question in terms of numbers and direct vs connections.

Overall the future is still probably murky for the airline in any case. Even if the financials have been reasonable I think it likely that they have all the problems associated with companies like Northwest and American over the last several years, and have probably had to declare bankruptcy more than once. The dream is that they are something of an American version of Emirates, flying everywhere, and being a reasonable choice for many passengers with destinations outside their home country and doing this with a very economy oriented coach cabin paying for very high end premium service that keeps up the image of the company and brings up yields. More likely they've turned themselves into just another struggling American major carrier that is if anything weaker than the others with a limited domestic route and even more boom/bust overseas routes than the others. That said, they may well have ended up benefiting overall from being in a position that limits their exposure to the regional market and short range domestic flying (though I'm sure something like Pan Am express would have happened at some point, but be considered a core part of the network, albeit much smaller than the affiliates of other major American carriers). I somewhat doubt that they would have been acquired outright by another carrier in this period if they can keep the company whole, being just a little too much to swallow whole at once, though once segments off the network start disappear all bets are off (though with the mega mergers of the last couple of years the more time passes the more likely acquisition becomes). Similarly, I doubt that they would have at any point after the early 80s been anything like solvent enough to seriously consider buying another carrier themselves, though discussions may well have happened, particularly in regards to Northwest.

Good god, this got way longer than I intended. I'm going to post now, but will revisit in the morning to see if I wrote anything really insane given how late it got while I typed. In any case I'm going to cross post this to an alternate history forum I mentioned earlier since it got so long and will report back if anyone there has interesting feedback. So let me know what you think of this scenario... Within reason? Missing something that makes it obviously going to fail? Or possibly just requiring Alien Space Bat intervention to actually arrange for without hindsight?

tl;dr
giant bit of speculation as to how Pan Am could have been saved, let me know what you think.
 
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Just a minor revision on having reread this; it occurs to me that the 747 purchase was actually largely a project of Juan Trippe, and by his retirement the aircraft were almost ready to go. This doesn't really change much in terms of proposed strategy for the company, except that the L1011 fleet is unlikely to be all that much larger than historical; I would certainly try to buy some more than historical given that there won't be any National DC-10s coming, but for the most part it will probably work out better to accept underutilized 747s where the 707s don't work through the 70s.

The large collection of 747s is not going to help at all with the domestic strategy in the 80s, but the extra capacity should be a help with the vacation and budget operations. I would definitely engage in some kind of sell off of 747s during the 80s to help raise funds for more aircraft better suited to the domestic network, but their resale value is questionable and decent aircraft were in short supply at the time. I would expect to see the entire tri-jet fleet operating domestically and underutilized 747s spread liberally through the network once domestic gets started. I'd also think that more cargo conversions than our time line would be made as an attempt to maximize utilization of the jumbos that have ended up as the core of the fleet but are ultimately too big, burn too much fuel and cost too much to acquire.

All in all, more risk, but more opportunity for the economy and vacation strategies to work properly as well this way. I DON'T think that there's any way that the Pan Am building is going to be kept in company hands this way. This makes it even clearer to me that the package vacation and discount fare programs are make or break for the company; they either work and save it or fail and bring it down. This also solidifies my view that if the company does survive it is going to end up taking the not dramatically successful but surviving route I talked about earlier. In the 90s I'd expect to see an airline that has a reputation but a distinctly declining real world service as the 757/767 fleet ages. Domestic ops would be dominated by 757s which the airline has overcommitted to in much the same way the 747s were, having bought into the 757 being a direct 727 replacement as Boeing was trying to sell it. Smaller 737 NGs probably do appear late in the decade, but not in huge numbers and are really mostly about replacing classics operating in the Caribbean and displacing the 757s from their worst performing domestic operations like the shuttle.

The first gen 747s probably don't go anywhere until the 777 appears, and how quickly they disappear at that point is dependent on the financial position of the company again. My best guess would be that the SPs are replaced by a very small order of 747-400s in the early 90s, but the bulk of the 747 fleet that remains (some having been sold as 767 and 757 appeared in the mid 80s) is slowly replaced with 777s from 1995 on but at a relatively slow delivery rate. My best guess is that the post 9/11 downturn will be the death knell for the remaining original 747s.

I'd guess that the current airline would have a slowly shrinking 767 fleet being partially replaced by 777s, around a dozen 747-400s that there is constant talk of replacing but about which a decision hasn't been made (my guess is they could well end up being around as long the 747 Classics, and that they will not ultimately be replaced by true VLAs, unless you count the 777-300) a good number of 757s which the company perennially worries about replacing long term, but which are ultimately likely to be replaced by a combination of 787s and 737 MAXs over the next 15-20 years.
 
Wow... you've really thought this through! I'm not knowledgeable enough to comment on how plausible this is, but you've certainly done your research!
 
The problem Pan Am had is it had no domestic routes feeding their overseas flights. That was why the National purchase. At the time National was one of the better run and profitable carriers. But it still was not a good fit as National didn't have national coverage.
As for the 747's Pan Am is the airline that got Boeing to build it. With all the long range flights Pan Am had it was a good idea. Then the oil shock hit.
The 757 was indeed developed to replace the 727. At first it was supposed to be an enlarged 727
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'
What really killed Pan Am is it could not adjust to the deregulated world. It needed a domestic routes to feed the international routes.
docfl
 
I'm not going to get too deep into the weeds on this, but the idea that purchasing the 747 was a mistake is simply incorrect. By 1970, the 707 fleet was a decade old and economically inefficient, suffering from both high cost per available seat mile (CASM) and limited cargo capacity. For carriers like Pan Am, cargo revenue on a route can be as profitable, if not more so, than passenger traffic. The idea behind the 747 was to increase cargo capacity and drop the cost per seat-mile. It did so brilliantly, as it was designed to.

The main problem Pan Am had was that its main international gateways (JFK, MIA, SFO, LAX) were/are poor domestic hubs and, in 1978, each of those airports was (and remain to this day) seriously deficient in a major way. Each airport of the day that would have made a good domestic hub was, at the time, a lousy choice for international traffic. The sole exception here might have been Washington/Dulles, which, in fact, wound up as a UA hub some years later. But even today, IAD remains a ishthole of an airport, burdened by remoteness from the area it purports to serve and substandard terminals. And, circa 1978, it still ran on the ridiculous mobile lounge concept which made it unsuitable for a hub operation. True, PA could have tried to hub up at a new major domestic airport, but would have faced difficult domestic competition from existing carriers that inhabited those airports; i.e. ORD had AA/UA, ATL had DL/EA, DFW had AA/DL, etc. The big domestic growth carriers of the late '70s/early '80s were either the traditional trunk carriers or the expanding carriers like US, RC, and PI that built up hubs at underutilized domestic airports like PIT, CLT, DTW and MSP. Moreover, PA was particularly constrained by the fact that while the domestic market had become deregulated, the international market remained highly regulated, which would have made the shift to new hubs exceedingly difficult if not impossible. The US/EU "Open Skies" concept was some years away.

In short, as a standalone entity, PA was basically screwed, and the handwriting was on the wall long before the PA103 lawsuits started streaming in. Short of the acquisition of a major existing trunk carrier (i.e. UA/AA) it was probably doomed to fail and such an acquisition wasn't likely to happen due to antitrust concerns. Heck, even TWA, which was the other major US flag carrier and did have a decent pre-dereg domestic network of its own on which to build, and which grew internally, merged with Ozark and invested heavily in the lower CASM 757/767 went down the tubes (though Carl Icahn had a lot to do with that).
 
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Apollo 20 hit many of the problems on the head. Post-deregulation, Pan Am's fate was already pretty much sealed unless they could hammer their way into new markets, particularly in the Pacific Rim and Europe - and with TWA around and most of the routes there also covered by nations' flag carriers, many of which are state-owned, getting in is going to be hard, particularly with Pan Am's reputation.

What may help post-deregulation is for them to really push hard to get longer-distance domestic routes, and move away from their traditional (and usually both crowded and somewhat deficient) hubs into other spots. Keeping the 707 fleet on domestic routes would help for a while, but the others are right in saying that you would need to re-engine them at the very, very least to keep them usable and profitable - and even then, by the mid 1980s they are obsolescent and probably starting to get mechanically troublesome. They needed replacements by then, and as good as the 757 was, if Pan Am is gonna get ahead of the curve, a smaller widebody would be a better call, which means either a 767 variant or the Airbus A310. The L-1011s and even some 747s converted to a one-class configuration would also likely be used on good domestic routes. Going into the city hopper business is not gonna be that helpful, as lots and lots of people are already there, and such business in the bread and butter of Northwest, United, American and Delta, not to mention city hopper experts like Southwest. Pan Am getting into the domestic market would, however, require the clause of the deregulation bill allowing them to do so to actually be enacted - it wasn't IOTL, which is why Pan Am went looking to buy National, to get the routes via taking over a competitor, and as pointed out, National's network wasn't as good as it needed to be.

Another option might be to just try and bury TWA. Pan Am was for the most part seen as the superior of the two airlines, and knocking TWA down could help improve their market share on the international routes. Buying them out would be an option but an expensive one - but then again, Pan Am's cash reserves in the early seventies were in excess of a billion dollars, and they did not have to borrow much to even buy National in 1980.

But if you really want to go for a trick shot, have the company jump into other areas of the transport business outside of airlines. Their ample cash reserves meant that this could be done, and if done right could be a major way to improve the company's bottom line in rough times.
 

Clipper747

Banned
Pan Am had quite a few problems including management or rather needless micromanaging from the CEOs after Trippe most notably William Seawell and Ed Acker. Both of them helped drive PA into disaster.
The number 747 was excessive, 32 in the fleet by 1972. PA bargained on traffic going up by 1970, instead it went down and didn't recover until mid '76.
No domestic routes really put the pinch on the airline. They could've purchased TWA in 1969 but the Civil Aviation Bureau (CAB) and certain members of Congress who despised PA would never allow it.
The fuel crisis of 1974/75 forced PA into cutting as much fat as possible with the intent of making attractive with potential outside buyers one of whom was supposed to have been the Shah of Iran. That fell through.
Traffic worldwide went up from 1977-1979 and PA made it in the black the first time since '68.
The National deal was a disaster but not the final nail for PA.
PA in the 1980s was now up against both US and Asian carriers who were giving PA a run for their money on every route and as such along with Ed Acker's micromanaging began to bleed the airline dry.
Fortress hubs in the US blew PA out of the water in markets like Dallas, Chicago, Miami, Atlanta, Houston, and Boston.
PA needed new aircraft starting in 1984 and Airbus got the order. The A300s, A310s would replace the DC-10s and L1011-500s. Younger 747-200s bought second hand from carriers like Singapore and even United helped supplement the fleet.
Had PA survived they would've gone with an all Airbus fleet that much is certain. The fleet commonality between the A320s and A340s meant saving big bucks for a carrier like PA. As a matter of fact Braniff II which flopped like it's original predecessor took delivery of a number of A320s meant for PA in 1989/90.
The two nails that did PA in, were the selling of the Pacific routes to United in late '85 and Lockerbie in '88.
PA was huge in Frankfurt. I can't count how many times I flew on PA and always went through that airport. It easily rivaled Heathrow as the lynchpin for their European operations.
When Lockerbie occurred people began to find out just how poor the airline's own security was at FRA. PA had it's own security system at that airport and it was touted as being very very secure. It wasn't. The supposed bomb sniffing dogs they had were not trained to sniff anything, it was all for show. Public confidence for PA sank to an all time low and from '89-91 the carrier was in free fall. I flew PA twice in '91 and it was a sad sight. I felt sorry for the employees in a way. They went from being haughty and felling on top of the world to the dregs of the industry alongside Lorenzo's Continental and Eastern.
My father flew on them from JFK-Belgrade via FRA in November '91 just one month before shutdown.
It's weird seeing a TV show about an airline most people have never been on and yet I can remember PA so well for all my trips taken with them from my first in 1969 to my last in August '91.
 
Didn't airbus give Pan Am a sweetheart deal on some A 300s? I was looking at airliners.net and found this

2005482.jpg

I cant remember if it was Pan Am or Eastern who got the first Airbus airliners in the US.
If I remember correctly Pan Am did also have ownership in a couple of hotel chains that they had to sell off. Also dont forget the Pan Am Building.
docfl
 

Clipper747

Banned
Didn't airbus give Pan Am a sweetheart deal on some A 300s? I was looking at airliners.net and found this

2005482.jpg

I cant remember if it was Pan Am or Eastern who got the first Airbus airliners in the US.
If I remember correctly Pan Am did also have ownership in a couple of hotel chains that they had to sell off. Also dont forget the Pan Am Building.
docfl



Eastern was first with the A300 in 1978. PA was given a deal for the A300/A310/A320 aircraft.
I remember seeing one of PA's first A310s at Frankfurt in July '85. Quite a surprise.
 
What about just doing international flights better and faster than anyone else? Maybe with a supersonic transport. ;)
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Didn't airbus give Pan Am a sweetheart deal on some A 300s?

Yes, they did. My thinking on the company going Boeing this TL is that with the strong desire for re-engined 707s Boeing is going to want some kind of assurance that the 757 will in fact sell (in house competition was apparently a big part of the reason they decided not to proceed with the 707-700 OTL, though this decision ended up having a good deal to do with the situation we see today wherein a good number of DC-8s are still flying cargo and the 707 has virtually disappeared). I also am operating on the thinking that Pan Am perceives the 757 at an early date as the true successor to the spirit to the 707 and between demands from commitments from Boeing and the large number of long thin routes they operate decides to hold out for the 757, going with the 767 as a widebody twin for the commonality benefits despite the potential up front savings of going Airbus at this time.

One thing I didn't mention in the TL originally is that there may yet be room for Pan Am to drift toward Airbus in the 90s. Particularly if the company orders A320s around 1990 as a supplement to the Boeing twins domestically and direct replacement for 737-200s. If the company is happy with the performance of the A320s (and I don't see why they wouldn't be) the A340 could look like a very good option for replacing 747-100s, which would likely lead to at least a few A330s, possibly (though I tend to think not) a SMALL number of A380s and very likely A350s. That said, the A340 didn't come all that much earlier than the 777 and I tend to think that that aircraft would look more attractive to the company in the early to mid 90s.

If I remember correctly Pan Am did also have ownership in a couple of hotel chains that they had to sell off. Also dont forget the Pan Am Building.

InterContinental Hotels is mentioned in the TL as a pretty core part of the strategy for getting bodies in seats post deregulation before a domestic network comes online. I suspect that the Pan Am building would be sold much as OTL to raise funds during deregulation, just that the money would go more to fleet expansion directly than to buying other airlines.
 
What may help post-deregulation is for them to really push hard to get longer-distance domestic routes, and move away from their traditional (and usually both crowded and somewhat deficient) hubs into other spots. Keeping the 707 fleet on domestic routes would help for a while, but the others are right in saying that you would need to re-engine them at the very, very least to keep them usable and profitable - and even then, by the mid 1980s they are obsolescent and probably starting to get mechanically troublesome.

Going into the city hopper business is not gonna be that helpful, as lots and lots of people are already there, and such business in the bread and butter of Northwest, United, American and Delta, not to mention city hopper experts like Southwest. Pan Am getting into the domestic market would, however, require the clause of the deregulation bill allowing them to do so to actually be enacted - it wasn't IOTL, which is why Pan Am went looking to buy National, to get the routes via taking over a competitor, and as pointed out, National's network wasn't as good as it needed to be.

The 707-700 is mentioned specifically, and I agree that without it there is going to have to be a serious re-evaluation of whether the 707 can or should stay longer than OTL. The alternative would really be more L1011 and 727s which could help more when it comes time to build a domestic but is going to be quite expensive at a time when the company has a lot of expenses and a distinct shortage of resources.

I agree entirely about not getting into city hopping (with the possible exception of the Shuttle service, which was profitable OTL and seems like a very good move for establishing a domestic brand). My approach to to dealing with missing clause in the deregulation bill is, as outlined in brief, to buy a small carrier for it's operating certificate and using that to build a domestic system from scratch. Alaska would seem like a decent target, being small enough at the time to be unlikely to create some kind of bidding war, having a network that fits reasonably well into Pan Am as is and not being likely to overly disrupt the larger company in the way National did.

In terms of what the domestic network would look like, I agree that it needs to be long range based. My approach is to maintain the existing gateways as the national hubs for at least the 80s. Certainly this does cause geographic problems, but I would also very much focus the network on feeding the international services first and foremost. Certainly domestic passengers are needed to sustain the company, but building an all new network from scratch in the early deregulation era and doing it with the overhead of a major carrier is going to be extremely challenging at best.

Specifically I'd be looking at rather low frequency services from each of the existing hubs (JFK, MIA, SFO, LAX) to major centres with significant amounts of overseas traffic in their own right. More frequent services aimed more directly at purely domestic traffic would early on focus on connections between the hubs where Pan Am is better established and aircraft availability will be less difficult. In the long term domestic hubs and focus cities are clearly going to be needed, but under even the most optimistic scenario creating the domestic system is going to be a very long, rough road, and going too far too fast seems very likely to bleed the company dry.
 
What about just doing international flights better and faster than anyone else? Maybe with a supersonic transport. ;)

That certainly what I envision the airline going... It's just that luxury alone has never been able to keep an airline going. In the end the company would, ideally, look like Emirates, with very good premium service and very budget oriented economy services at the same time. While I certainly think that Pan Am in this TL should try and keep the standards up for the premium services my suspicion is that the premium service would deteriorate over time between the age of the aircraft, the difficult investing in upgrades and the companies focus on the much more profitable coach cabins with more limited service.

As far as SSTs I really don't think its much of a stretch to see Pan Am buying a few Concordes, and IMO if they get any they probably get enough to perhaps double the production run of the aircraft. As I mentioned in the full TL I suspect Pan Am operating supersonic on the Atlantic (and they would for the prestige if nothing else for as long as Concorde is part of the fleet at all) probably makes the economics of Concorde worse for all the operators, splitting the limited demand for flights even farther than OTL. My guess is that they would operate from JFK to both London and Paris in direct competition with BA and AF along with to Frankfurt given their hub there (although this destination pushes Concorde's range as delivered it was doable fairly as upgraded over their years in service and there are signs that further aircraft would have performed marginally better than the only twenty or so actually built). There is of course the interesting prospect of some kind of alliance like pooled SST operation if a third company entered the Atlantic.

The pacific is more interesting at the end of the day, and I came up with a map of what I think might be the largest realistic long term PA Concorde operation. I'd also expect to see quite a few interesting experimental routings should PA end up operating Concorde, and there are interesting implications for the Aircraft should PA operate it. First and foremost if PA get the aircraft to Australia I would expect BA to try harder to make a commercial go of LHR-BAH-SIN-SYD, the last leg of which never even entered service OTL. Secondly, especially in the Pacfic there would seem to be the distinct potential for other companies (thinking along the lines of QANTAS, JAL and Singapore especially) to pick up a small fleet if no other reason than to avoid looking like they have been left completely behind. I would also not be at all surprised to see Lufthansa buy enough to operate their own version of FRA-JFK.

All in all I wouldn't see such a change as enough to fundamentally change the outcome of the Concorde program, or to get a second generation SST built, but we could well see even a small order from Pan Am resulting in a few airframes scattered across a lot of the globe. In terms of Pan Am specifically its a wonderful image, and I don't think overly implausible for the company to say damn the cost we're going to be among the first SST operators, but its just not a big enough project to fundamentally change their financial position for the good or bad.
 
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I think that it is easy to get lost in details and to miss the bigger picture when it comes to the airline industry and the fate of certain airlines over others.

With the benefit of hindsight a strong case can be made for saying that the Boeing 747 was too far ahead of its time and not an appropriate plane for most of the airlines that ended up purchasing it at the time. Load factors are commonly around 80% to 90% these days in the airline industry, but these used to be around 50% back in the sixties and seventies.
The ideal 707 and DC8 replacement for most of the airlines that ended up purchasing these planes, would have been the L1011-8. A long range TriStar with better performance and a slightly higher capacity compared to the DC10-30. This would be the ideal aircraft for Pan Am European routes and more importantly for the multi-stop operations to Asia, Africa and South America. Ultimately this aircraft or a BiStar shrunked version of it would also be perfect for coast to coast operations stateside.
Rolls Royce avoiding its problems could be a pod for the development of this aircraft. Alternatively, have Douglas and Lockheed merging thus avoiding duplication of efforts on the large trijet segment of the market.

Falling the procurement of this alternative aircraft, Pan Am should better opt for the DC10-30 and a smaller number of 747s.

Pan Am ending up with Concorde SSTs would make no meaningful difference whatsoever, unless these marketed properly and a nice niche is found for them. British Airways ended up making hundred of millions of pounds of profits by shrewdly marketing its Concorde product. Air France never broke even on the other hand, but it could have if the company had been more commercially minded during the 70s and 80s.
Using Concorde on the West Coast to Tokyo run via Anchorage might be the right nice. Flights to Hawaii don't have enough premium clientele for Concorde runs.

While LAX, JFK and other international gateways airports don't necessarily make great domestic hubs, they generate a lot of origin and destination traffic, which is an important factor in determining whether a city can support a hub or not. I am also tempted to say that Pan Am decisively setting up a huge hub in for example JFK could be a catalyst for a rebuild/large scale capacity increase of the airport.
Pan Am needs to set up a domestic network on its own, tailored to meet its own needs. Merging with someone else simply won't cut it, especially if the company cultures, unions and such are incompatible, as was the case with National Airlines. The "B" clause of Deregulation preventing Pan Am from doing do, therefore needs to be lifted.
Merging with TWA will be merging two cripples together in my opinion. TWA post deregulation was a basket case, with an old fleet, a crappy hub and poor management. Pre deregulation the picture would have been different, but the companies had such proud traditions and culture that a merger might be very problematic.

An interesting POD to allow the survival of Pan Am could be much earlier airline deregulation in my opinion, or AA international arm not being merged with Pan Am during the early fifties.
Say that we get Goldwater elected as President in 1964 or 1968 on a pro liberty ticket that include civil rights and deregulation of parts of the economy. An earlier deregulation will turbocharge the growth of the industry for a few years and also begin the consolidation process that started during the 1980s a decade or a decade and a half earlier. If Pan Am leverage its assets nicely they can easily come out as one of the top dogs, both domestically and internationally. The rise of small players will be inevitable and earlier here, but unlike OTL they won't be as much of a threat.
 
I believe Pan Am had options on the Concorde. Also the Boeing 2707 SST.
20s_2707_2panam_thumb12786245854c3643498c9bf.jpg

photo_878.jpg


Once it was canceled they canceled the Concorde option as well.
Not the first time they hedged their bets, They did the same with the DC-8 and Boeing 707. They ordered both.
docfl
 
I have to agree that an earlier deregulation is probably a more interesting TL overall, and maybe something I should work on...

Deregulation around the time the 747s appear would put Pan Am specifically in a very good position, and as you said, supercharge the industry. It would definitely be interesting to see the entrance of new carriers at an earlier date. Southwest in particular started commercial service within Texas in 1971, and could conceivably have been operational a year or two earlier without the legal trouble caused by trying to avoid regulation.

There's definite potential for the future of the discount carriers to look more like People Express and the shuttle services, with more or less fixed fares and simple versions of yield management. I could quite easily see someone trying to expand the clockface schedule buy on board mentality of the shuttle to nationally. In fact, I see potential for an early deregulation that results in the traditional major carriers being the big winners and the discount model appearing to be largely a failure when the discounts as a group go largely the way of People Express, annoying customers with poor service (at a time when the majors are still looking pretty good) and blowing their resources on capacity and expansion when yield management and fiscal caution would be more valuable. Perhaps Skybus modelled on Euro low cost service could end up the first really shining example of successful discount airlines in North America?
 
I believe Pan Am had options on the Concorde. Also the Boeing 2707 SST.
20s_2707_2panam_thumb12786245854c3643498c9bf.jpg

photo_878.jpg


Once it was canceled they canceled the Concorde option as well.
Not the first time they hedged their bets, They did the same with the DC-8 and Boeing 707. They ordered both.
docfl

That's pretty accurate, although one thing that must be considered, and can be played with in a TL is that the fuel prices that fatally wounded Concorde were largely separate from the project cost escalation that killed the 2707. If, for example, it was made clear that no American government funds were going to be offered to an SST Concorde be the only serious option for supersonic aircraft, and a slightly earlier cancellation of the American project could leave Pan Am (and potentially others) more frustrated at the loss of the more attractive aircraft than relieved at the prospect of not being pressured to buy and operate ultra expensive SSTs.

As far as the Pan Am order specifically they ordered six outright and optioned two more before they initially cancelled one and later the rest of the order sometime around 1973.

On Dunois' note about Hawaiian I agree that there's no market for West Coast - Hawaii Concorde service, but Honolulu makes a good jumping off point for flights to Australia and Singapore that have more potential. It might not survive, but if the airline had the aircraft they'd try it, and my suspicion is that at least LAX-HNL-SYD/AKL (my guess is that a good deal of this routes real potential would be in picking up trans Tasman traffic (I think that fifth freedom rights were available between Australia and New Zealand at the time, correct me if I'm wrong) assuming QANTAS doesn't get an Concorde's for this route) would survive, as would probably a less than daily LAX-HNL-GUM-HKG. Tokyo though Anchorage would definitely be the potential for real profit with Concorde in the Pacific though.
 
I have to agree that an earlier deregulation is probably a more interesting TL overall, and maybe something I should work on...

Deregulation around the time the 747s appear would put Pan Am specifically in a very good position, and as you said, supercharge the industry. It would definitely be interesting to see the entrance of new carriers at an earlier date. Southwest in particular started commercial service within Texas in 1971, and could conceivably have been operational a year or two earlier without the legal trouble caused by trying to avoid regulation.

There's definite potential for the future of the discount carriers to look more like People Express and the shuttle services, with more or less fixed fares and simple versions of yield management. I could quite easily see someone trying to expand the clockface schedule buy on board mentality of the shuttle to nationally. In fact, I see potential for an early deregulation that results in the traditional major carriers being the big winners and the discount model appearing to be largely a failure when the discounts as a group go largely the way of People Express, annoying customers with poor service (at a time when the majors are still looking pretty good) and blowing their resources on capacity and expansion when yield management and fiscal caution would be more valuable. Perhaps Skybus modelled on Euro low cost service could end up the first really shining example of successful discount airlines in North America?

One of the positive effects of an earlier deregulation will be to prevent or at least curtail the "race to the top" in customer service extravagance. Serving a steak in economy class on a BOS-WAS flight is certainly very nice. But it is an operational headache and to be very honest, I very much doubt that many of the passengers actually consumed the food on offer. The best example of extravagance the industry had in the United States, was Braniff's Air Strip. The girls were already sexy enough in their standard uniforms and there was no need to add another dose of sexyness with different uniforms at different phases of the flight.

There is a huge difference between offering consistent onboard and on the ground service and going over the top into extravagance and actually miss the point of what the customer wants. On this basis, I would like to point out that while all the legacy carriers have bag charges, buy on board for food and drinks. It is still free to check in your bag on Southwest and you even get a free snackbox on a longish flight for your pains as well! Southwest is supposed to be a low cost carrier, but now has de facto better services than most legacies, go figure ...

An earlier deregulation will also mean that most of the legacy carriers hopefully tackle their productivity or lack thereof before something likes the oil crisis happens. Some carriers will definitely adapt before others, and I very much think that Braniff will be one of the early casualties. Clockface timetabling or skytrains between the major US cities, will happen much sooner than was the case OTL with an earlier deregulation as well. A side effect of this will be to dampen the demand of larger planes though, since it will quickly become obvious than flying ten 727s a day between Dallas and Atlanta is attractive on a timetable basis than using three L1011 flying at irregular hours and stopping in New Orleans along the way!
We could see new planes being developed as a result. One obvious candidate is the 727-300, a further stretched 727 with more powerful engines. If Douglas and Lockheed merge, or if only one of them does manage to sell a trijet. A shrinked twin engined version of said trijet will be near inevitable in my opinion in this environment. The plane would be ideal for transcontinental runs and for runs between busy cities pairs like New York and Chicago.
 

Clipper747

Banned
PA did have orders for both Concorde and the 2707. The 2707 was axed by Nixon I believe because of costs.
As for Concorde Pan Am was disappointed with the aircraft for two reasons:
It only carried 100 passengers and it carried no freight. PA wanted a plane that carried close to 200 pax with belly space for containerized cargo.

PA didn't purchase the 757 because they had plenty of 727s and few domestic routes to put them on like Northwest Orient or Delta whom were among the first to operate the aircraft.

Getting a new aircraft means spending a lot of money before that aircraft begins making money. You have to spend for aircraft, training, maintenance, ground equipment, and spare parts. That's one reason PA decided to go with Airbus...all of the cockpits for their aircraft are virtually the same.
 
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