Pan Am's descent into bankruptcy court was a hard landing for the airline that pioneered international flights, and analysts say whatever emerges from the reorganization will be nothing like the once-glorious carrier.
"They've had to take a number of very large steps backward in the hope that in the very long run they can move forward," said George James, president of Airline Economics Inc., an aviation consulting group. "It'll be an extremely difficult thing for them to accomplish."In filing for Chapter 11 protection from its creditors Tuesday, Pan Am Corp. cited the bombing of Flight 103 over Scotland in 1988, high fuel prices from the Persian Gulf crisis, and sluggish demand because of the recession.
The airline plans to continue flying while trying to regain its financial health.
It's a long way down for the company founded in 1927 by Juan T. Trippe, a 28-year-old former naval aviator. That year his Pan American Airways inaugurated the world's first scheduled international flight with a mail run between a dirt runway in Key West, Fla., and Havana, Cuba, using a wood-and-fabric Fokker trimotor airplane.
Within three months Pan Am was flying passengers between Florida and Cuba. Trippe said his goal was to "provide mass air transportation for the average man at fares he can afford to pay."
Some analysts suggested that the best Pan Am can hope for now is to rebuild its business so it becomes an attractive buy for a healthy airline.
Over the long run, Pan Am's problems have been rooted in a weak domestic route system that proved to be a handicap when airlines were deregulated, and analysts say those persistent troubles will be hard to erase.