Skygods: The Fall of Pan Am

by Gandt, Robert

  December 5, 1991

  In the sunless bowels of the Pan Am flight training academy, Harry Shepard cursed the A-300 simulator. He had to keep reminding himself that it was only a simulator—nothing more than a big, three-axis, hydraulic-powered, $2 million Nintendo game.

  Shepard sat in the left seat, straining to keep the flight director bars on his instrument panel crossed. Like most such training devices, it was a microsecond slower in control response than a real airplane.

  Shepard was going through A-300 training because he wasn’t one of the fortunates taken by Delta. He had been a 747 captain. Now he was downgrading to an Airbus A-300. He hated it.

  During the coffee break he noticed something odd. Outside on the maintenance ramp, there seemed to be more parked airplanes—Pan Am airplanes—than usual. Coveralled mechanics were going from airplane to airplane stuffing plugs into the engine intakes and exhausts, affixing covers to the probes on the fuselage. It looked like they were pickling them for storage.

  Shepard tried not to think about it. He had other things on his mind today. Like the A-300 simulator.

  Midway through the next period a call came from the training office: “Shut it down, guys. Gather up your bags and manuals and leave the building.”

  “Why?”

  “Why do you think?” The secretary’s voice was cracking. “We’re closing down. We’ve got fifteen minutes to leave the building.”

  Shepard and his training partner exchanged glances. Closing down? You mean. . .? Privately, each had expected it. Shepard had known since he saw the parked airplanes.

  They gathered their approach plates, their checklists, their cockpit paraphernalia. No one spoke. The front door was already locked. A uniformed security guard had attached a chain and padlock.

  “How do we get out?”

  “I dunno,” said the guard. “Try the side door.”

  They found the side door. It was a fire escape. There was a two-foot drop from the door ledge to a plat of shrubs outside.

  Shepard stood in the knee-high shrubs and looked back inside the building. All of them, pilots, instructors, secretaries, were standing in line, waiting their turn to hop out the side door into the plat of shrubs.

  So this is it, he thought. This is what it’s like. Jumping into a plat of shrubs. All in all, it seemed like an undignified way to end your career.

  In their darkest ruminations, the Pan Amers used to wonder how it would look. They didn’t have to wonder anymore. Today they were seeing it: Tango Uniform.

  It was a tableau of failure. Concrete ramps awash with parked airplanes. Idle tractors, tugs, trucks, left where they were last used. Passenger lounges empty as ghost towns, littered with used newspapers, useless timetables. Stunned faces, some weeping, some contorted with anger.

  The end had come suddenly, though the warning signs had been there for anyone to see. On September 1 the Northeast Shuttle was transferred to Delta. On November 1 the North Atlantic operation and the Frankfurt hub were transferred. What was left, the little Latin American operation everyone was now calling Pan Am II, was supposed to emerge from bankruptcy in the first week of December.

  It never made it.

  Part of the takeover arrangement had been that Delta would cover $80 million of Pan Am’s operating losses during the transition period. During the autumn of 1991, Pan Am roared through the $80 million like a prairie fire. To preserve its investment, Delta kicked in another $35 million. That, too, vaporized. There seemed to be no end in sight.

  Alarm bells were going off in Atlanta.

  The biggest problem was that no one was buying tickets on Pan Am II. Advance bookings were appallingly absent. It was as though the nation’s travel agents, on whom the airline depended for its customers, had already peered into their computer screens and read Pan Am’s obituary. You want to fly on Pan Am? Well, maybe you ought to think about booking on American. Or Avianca. You don’t want to worry about getting stuck down there. Remember when Eastern and Braniff went under, all those passengers stranded with no way to get home?

  At a November 26 meeting, Pan Am’s chief financial officer, Rolf Andresen, reported to Delta executives and Pan Am’s creditors that traffic was down. Revenues were running behind projections. Way behind.

  Wary glances flashed among the silent Delta executives.

  Then the Pan Am management people and the creditors went on to explain how they would deal with the shortfall. They would just have to lower reserves. And they might try to obtain “concessions from suppliers, employees, and others who had a stake in the airline.”

  Nothing was said, but a limit had been reached. Clearly, the Pan Am II enterprise was turning into a bottomless pit. The Delta team packed their briefcases and hurried back to Atlanta.

  The next week, thirty-three days after the transfer to Delta, they met again in the court of U.S. bankruptcy judge Cornelius Blackshear. It was December 3, the day the new Pan Am was scheduled to shed its Chapter Eleven protection.

  In an apologetic tone Delta lawyer Lawrence M. Handelsman told the court that after a “weekend of agony” his client had made a decision. Delta had decided not to pump any more money into Pan Am. “The world has changed,” said Handelsman. That seemed to be his explanation. Twice more he said it, as if the point needed emphasizing. The world has changed

  And so it had.

  The next morning, Thursday, December 4, 1991, Pan Am’s offices opened for business. And then they closed again. There was no more business. Without the infusion of any more Delta money, Pan Am II was extinct. Tango Uniform.

  Pan Am II’s president, Russell Ray, who had been on the job only a few weeks, told the press, “I am distressed that this effort has failed.”

  He wasn’t nearly as distressed as Pan Am’s creditors—and employees. Before the day was over, recriminations were landing like mortar shells. “You can’t tell me an airline as big and smart and sophisticated as Delta, that has known more about Pan Am than Pan Am does since April and that has been involved in every decision, that they wake up one night and say ‘the world has changed,” said Henry Miller, investment banker at Prudential Securities.

  Most industry observers, though, accepted Delta’s side of the story. In retrospect, the pullout seemed inevitable. “I think their offer was for real,” said L. John Eichner, chairman of Simat, Helliesen & Eichner, an airline consulting firm. “I’m not questioning their good faith, just their competence.”

  Did Delta’s fiscally temperate management, in cutting a deal that would eventually amount to $1.7 billion, suddenly develop cold feet? “They’re looking into the future,” said Henry Miller, “and they’re very scared about what they see as the prospects for the business.”

  The day after the shutdown, Pan Am’s creditors filed a ten-count lawsuit against Delta for breach of contract for $2.5 billion in damages. “This was deliberate,” said Leon Marcus, the outspoken attorney for the creditors committee. “They dropped the bomb on all these employees and the traveling public.”

  In Barbados, sitting in the cockpit of the Boeing 727 Clipper Goodwill, Captain Mark Pyle watched the Pan Am station manager walking toward the airplane. Pyle could tell by the manager’s face that it was bad news.

  All the news these days was bad. Pyle and his crew already knew before they left New York that Delta Airlines had withdrawn from the Restructured Pan Am deal. The news was only bound to get worse.

  Pyle read the Teletype message the manager handed him. In curt language it declared that as of nine o’clock that morning the airline had ceased operations.

  Pyle went back to the cabin to tell the flight attendants. Each of the women had been flying for Pan Am, or for National, for over twenty years. They all broke down in tears.

  The manager wanted to know if they would fly the airplane back to Miami. He said he would find a way to buy fuel. Not only were their revenue passengers stranded there in Barbados, many of the now-unemployed Pan Am staff wanted to return to the United States.

>   For Pyle it would be one of his last Skygodly decisions. He was a new captain, and he’d waited eighteen years to get there. He was a former instructor, now a check pilot, and a dedicated company man. He liked to run his airplane by the book.

  “How long will it take?” he asked.

  “Maybe two hours.”

  Pyle had to laugh. What could they do? Fire him? “We’ll wait,” he said. “We’ll wait as long as it takes.”

  Two hours later, when the passengers and employees were aboard, they took off for Miami.

  A hundred miles out, the flight engineer, Chuck Freeman, made radio contact with Pan Am operations. Then he turned to the captain. He was choking back tears. “Mark, we’re the last flight. . . the final flight. They want us to make a low pass.”

  Another decision, probably his last. Low pass? And then it occurred to him: This is a historic moment. A low pass? Absolutely.

  So that’s what he did. Low. He brought Clipper Goodwill right down the centerline of runway 12, low enough for the folks on the ground to count the rivets.

  They turned downwind, landed, and taxied toward the gate. It was like a victory parade. Vehicles—police, fire trucks, security cars, tow trucks—lined the taxiway. Television crews followed the taxiing airplane. Ramp workers came to attention and saluted. Water cannons fired streams over the slowly moving jetliner. All the Pan Am personnel at the gate were standing at attention as Pyle brought the jet to a stop.

  Pyle shook hands with Chuck Freeman and Bob Knox, the twenty-three-year veteran first officer. They had just flown the final trip of a Pan American Clipper.

  And that made them unique. It made them—in effect—the last of the Skygods.

  In Manhattan the Primitives still remembered their old enemy, Juan Trippe. They were forced to remember him, even in death, because the great slab he had erected stood there just as it always had, astraddle Park Avenue. And his daily reminder to them still perched atop the slab, smacking them in the eye each morning.

  The old man was gone, and now even his Imperial Airline was extinct. But there it was anyway, every morning, that damn reminder in letters fifteen feet high: PAN AM.

  For several more months it stayed up there, lurid and presumptuous, chiding them like a rebuke from Trippe’s grave. The absurdly tall letters and the globe-shaped logo still conjured the old man’s fantasies:

  Supersonic transports. . . lunar flight. . . Clipper ships sailing to the stars. . .

  And then one morning they looked up—and it was gone. The logo and the tall letters, PAN AM, had been removed. In their place would be erected the name of the insurance company that owned the building.

  The old Skygod and his airline were officially dead. The Primitives had won.

  ROBERT GANDT is a former naval officer, international airline captain, and an award-winning military and aviation writer. He is the author of more than a dozen books, including the novels The Killing Sky and Black Star Rising and the definitive work on modern naval aviation, Bogeys and Bandits. His screen credits include the television series Pensacola: Wings of Gold. His acclaimed account of the Battle for Okinawa, The Twilight Warriors (Broadway Books, 2010) was the winner of the Samuel Eliot Morison Award for Naval Literature. He and his wife, Anne, live in the Spruce Creek Fly-In, an aviation community in Daytona Beach, Florida. Visit his website at www.gandt.com.