The glory of the Pan Am name made it almost inevitable that it would return following the original's demise. Interestingly the second incarnation had more in common with another fallen giant, but the mid-90s was a challenging period to start an airline, especially one competing in the cut-throat Northeast-Florida market. The initial bright shoots of Pan Am II faded quickly and a merger with another low-cost airline could not stabilise the situation enough to stop Pan Am II from being a short-lived footnote in the history of the once glorious name of Pan Am.
Since deregulation of the US aviation scene in 1978 the majority of the USA's original regulated era airlines, and many new ones, have gone bankrupt or been swallowed by others. There has also been the temptation to try and bring back former glories and so many old names have been revived, usually with little success. That means there have been reincarnations of names such as Braniff International, Eastern Air Lines, Ozark, PeoplExpress and Frontier Airlines. Of those only the latter has had any sustained success. Of course, perhaps the most famous failed US airline is Pan Am and so it is little surprise that that name has also been resurrected - not once but twice.
The original Pan American World Airways ceased operations on December 4, 1991. By that time it was a shall of its former self, operating mainly from Miami and New York with a vastly reduced fleet, having sold off almost all its viable assets.
The Pan Am brand was sold, for $1.3 million, to Charles Cobb, CEO of Cobb Partners and former US Ambassador to Iceland. Cobb bought the brand to spearhead a new airline, one that ironically had more in common with Eastern Air Lines than the original Pan Am. Eastern had also gone bankrupt in 1991 but its name was tarnished by the destructive and chaotic end of the airline following the Texas Air takeover. Despite its failure the Pan Am name was still widely recognised and still had some lustre attached to it.
Cobb was working with Martin R Shugrue Jr - the former COO of Pan Am, President of Continental and the last man in charge of Eastern. They envisaged a new airline using the Pan Am name that would operate from Miami, where Eastern had been based since 1975. It was also Pan Am's last redoubt in its final months.
The plan was to use widebodies to operate long-haul services between major US gateways, such as New York, Chicago, Los Angeles, San Francisco and Miami. In this way they could offer feeder services to international carriers that didn't have a US partner. Fares were to be kept at about half the price of existing majors connecting these hubs.
The new airline had hoped to begin service in May 1996 but certification issues delayed this until September, which proved a significant financial problem as the airline had all its staff on payroll and ready to go. Initial services linked New York JFK to Miami and Los Angeles using a trio of ex-Eastern A300B4s.â
Further service was added with San Juan linked from both Miami and New York. An agreement with Aero Peru saw their passengers accessing the Pan Am network from Miami. The fleet eventually expanded to 6 A300s and in October 1996 it grandly changed its name from Pan American Airways to Pan American World Airways. The new Pan Am faced tough competition as American Airlines and United Airlines aggressively matched Pan Am's new lower pricing.
Even so, Pan Am had ambitions and was interested in making acquisitions. It had already looked at the takeover of Carnival Air Lines in July 1996, for $100 million, before it was even flying for itself - but pulled out after examining the carrier's books. In March 1997 it revisited the proposal but this time for $30 million with the primary shareholder of Carnival, Micky Arison, making a capital investment of $30 million in return for 9.5 million shares and 42% of the combined airline.
Carnival, as its name suggests, was owned by the cruise line Carnival. Originally formed in 1988, when Carnival tookover Bahamas ExPress, it had originally been designed to simply feed their cruise traffic and provide inclusive tours to Floridian destinations. The airline's low fares enabled it to outgrow this original premise and allowed it to gain a significant chunk of traffic from Miami and Fort Lauderdale to the Northeast (Eastern's traditional market).
It grew quickly with a fleet of A300s, 727s and 737-200s. In many ways was a similar operation to the new Pan Am. For example, it had an agreement with Iberia to transport connecting passengers from Miami to Los Angeles. Carnival also acquired newer aircraft and began to lease brand new Boeing 737-400s from ILFC in October 1992. As well as a few short-term leases seven aircraft joined the fleet, registered N401KW-N407KW.
Unfortunately for Carnival the 1996 Valujet crash in the Florida Everglades led to questioning of the safety of a wide range of low cost airlines. Although a lot of the federal and press attention was spurious the impact of it was damaging. No doubt the impact of this made a merger with the grand old name of Pan Am look appealing even if the new Pan Am was a fraction of the size of Carnival, which at the time flew 27 aircraft.
The merger of the two airlines was granted approval by the Department of Transport in early September 1997. The merger of Carnival into Pan Am began but neither airline was making money and both were facing liquidity issues. New leadership was sought by Arison and Marty Shugrue was replaced in late November by David A. Banmiller.
Only a small portion of the Carnival fleet was repainted into Pan Am colours but this included several of the new Boeing 737-400s. At least the following aircraft wore the globe - N403KW, N405KW 'Clipper Undaunted', N406KW 'Clipper Splendid' and N407KW 'Clipper Rapid'. Several of the 727s were also repainted but the 737-400s represent the only new jet type to have worn Pan Am colours since the collapse of the original Pan Am (since Pan Am already had operated both A300s and 727s).
Banmiller was unable to turn things around and the combined airline ceased operations and filed for bankruptcy on February 26, 1998. All the leased aircraft, including the 737-400s, returned to their lessors.
Banmiller's tenure lasted only into April. This wasn't to be the end of Pan Am as the assets of the airline were acquired by Guilford Transportation Industries. âThe operating certificate of the new Pan Am II was abandoned and Carnival was renamed as Pan Am. This third incarnation would emerge from bankruptcy and drag the glorious name of Pan Am through the mud for some years until eventually the Pan Am logo could only be seen on trains!
1996, Jan. Ziemba, S. Pan Am Gets Its Wings for the Second Time. Chicago Tribune
â1997, Mar. Pan Am to Buy Carnival. CNN Money
â1997, Mar. Carnival deal boosts Pan Am revival. The Independent
Pan Am II - Everythingpanam.com
Carnival Air Lines. RZJets.net
â95th Anniversary of Pan Am - The Florida Rebirth of 1996. Thefloridasqeeze.com
I'm Richard Stretton: a fan of classic airliners and airlines who enjoys exploring their history through my collection of die-cast airliners. If you enjoy the site please donate whatever you can to help keep it running: