This concept remains the cornerstone of air travel today, but an update was made in the wake of 1978’s Airline Deregulation Act. This legislation opened the field for other airlines to gain a foothold, and so Pan Am’s finances took a tremendous hit, according to Simple Flying. The effect was exacerbated by the reduction in passenger numbers that was a result of the rising inaccessibility, and so cost, of fuel. As in any industry, being forced to increase costs of goods and services can be fatal as it drives customers towards alternatives. When said alternatives were rising in prominence, as they were, it resulted in something of a perfect storm for Pan Am.
Early in the 1980s, measures to rectify the financial situation, involving making 5,000 members of staff redundant and ceasing services that were not profitable. “The Delhi Hong Kong sector has been unprofitable for a number of years largely because of competition and lack of traffic,” the company stated to Flight Global. It seemed that Pan Am could not obtain more assets or release burdensome ones.
Then the tragic Lockerbie bombing of December 1988 proved to be a devastating blow to the company.
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