Pan Am Case Study

Decent Essays

During the Second World War, Pan American operated many services for the military. In the postwar era, Pan Am reopened its Pacific and Atlantic routes (Banning). In 1947, Pan Am became the “first airline to operate a scheduled round-the-world service” (“Family Tree: Pan Am”). However, “by the mid-1950s, major expansions were over” (Banning). In 1968, Trippe announced his retirement as president of the company. This signaled the beginning of the end. In the 1970s, there were major increases in worldwide fuel prices, and declining travel, followed by deregulation and huge increases in competition” (Banning). Increased world terrorism, which culminated in the crash of Flight 103 in December 1988, which was “blown out of the sky over Lockerbie, Scotland, by a terrorist bomb,” left the company in financial instability and moral turmoil (Dallas and Gellene). Even after selling most of its assets, “many at bargain-basement prices,” the deficits remained” (Banning). Pan Am’s declaration of bankruptcy on December 4, 1991 signaled the end of the company (“Family Tree: Pan Am”).
The deciding factor determining Pan Am’s failure was its bankruptcy. As there is not sufficient information regarding the company’s stock prices, one must examine the other factors indicating the company’s failure. After only a few weeks on the job at Pan Am, Russel Ray, elected president and CEO in September 1991, found that “revenues were less than expected” and there was no hope “becoming financially

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