Strategy Implementation.

Pan America World Airways was one of the greatest airlines in the United States and

reached its peak point during late 1960s with carrying 6.7 million passengers over 20 billion

miles. In 1968, Pan Am had 150 jets that flew to 86 countries on every continent. The company

had more than $1 billion cash reserves because of the successful strategies. Until 1968, Pan Am

brought various innovations to airline industry, however, after that period the decline of the

company had begun.

The company followed different strategies in order to keep the notable place in the

industry. In the early years, Pan Am started South American routes under the names of American

Clipper, Southern Clipper and Caribbean Clipper. At the end of 1930s, the company began to

operate long distance routes to Europe and China. Another successful strategy of Pan Am is to

give a usage of ten long range Boeing 314 planes, which increased the effectiveness of Trans-

Atlantic service.

During the World War II, Pan Am was the only American passenger aircraft that can

travel internationally. At those years, Pan Am adopted unique styles of uniforms, more formal

rather than leather-jacketed. However, in the post-war era, the competition between airlines

started to increase and Pan Am tried to preserve its position in international routes using diverse

strategies. The company was able to re-establish the most of its international routes again,

nevertheless in domestic routes the situation was different. The U.S. government had not

authorized Pan Am to access domestic routes until 1977. At the year of 1947, Pan Am opened

"Round the World" route, departing New York and flying to San Francisco via points in Europe,

The Middle East, India, and Asia.

 In 1950, Pan Am introduced double-deck luxury Boeing 377. These aircrafts had

sleeper seats and berths, which gave Pan Am an opportunity to increase its sales. Another

strategy was that to add an economical aircraft at the same years, consequently Pan Am began to

be known as tourist airlines on various international routes. Also, it was the first airline to

launch Jumbo Jets (Boeing 747) from New York to London.

At its peak, the airline had very high returns and was known as worlds most experienced

cabin crew and modern fleet. Also, Pan Am had owned InterContinental Hotel chain, which it

created the opportunity for passengers to book airline tickets and hotel reservation in the

computerized reservation system at the same time. Most of the strategies that implemented by

that time were accomplished and all these brought the success to airline gradually. However,

upcoming strategies of poor management, deregulation and unions had caused Pan America to

fall over the long-term.

At the beginning of 1970s, Pan Am had invested in large aircrafts of Boeing 747s, which

decreased the profit margin in an enormous size. 1973 oil crisis was the main factor for

overcapacity problem in Pan Am airline. High fuel prices and increasing overhead costs damaged

the company heavily. By the mid-1970s, Pan Am had losses of $364 million and almost $1

billion debt. After that period, the company began to pay attention to domestic market and

attempted to monopolize the U.S. air routes by the method of merging with another airline.

Nevertheless, it was against the regulation of the U.S. government and Pan Am could not realize

to operate routes inside of the country. It remained as the American airline that operates

internationally only. All these factors which came from poor strategy implementation made the

bankruptcy come faster.

 During the years of 1980s, Pan Am began to sell off its assets such as 50 percent of

Falcon Jet Corporation, InterContinental Hotel Chain, which stake was $500 million. As the

company went backward at those years, sold its Pacific division, which is 25 % of overall route

system to United Airlines. However, these financial actions had not helped the company to

revive again. Since during that period, continuing terror act happened at Pan Am flights, which

damaged the reputation and image of company in a great scale.

Consequently, all these factors pave the path to lose the trust of customers in terms of

security during flights. In 1991, Pan Am reported the bankruptcy officially and Delta Airlines

purchased the remaining assets of the company. Generally, Pan Am could not handle the crisis

properly, hence this created different problems for the company after 1970s. Gradually, the drop

in the public confidence and trust led to downturn of the airline.