Fly the Branded Skies


Pan Am Systems freight carAn investor group announced in March that it has acquired the trademarks for Eastern Airlines and plans to launch a new carrier with that name.

But before they do, they may want to consider what happened to Pan Am. Because after 64 years, the storied Pan Am brand ended up not in the skies but on the rails.

The brand was sold off after the original Pan Am’s bankruptcy in 1991. In 1996, the blue Pan Am globe was flying once again on a single A300 christened the Clipper Fair Wind. But the second Pan Am didn’t last long; after a star-crossed merger with Carnival Air Lines, another Pan Am followed the first into bankruptcy.

The second Pan Am became the third when it was purchased by Guilford Transportation Industries, a New England freight railroad, for $23.5 million. Pan Am III flew aging 727s between cities in the northeast, Florida, the Canadian Maritimes, and the Dominican Republic.

In 2005, Pan Am III gave way to Pan Am IV when operations were transferred to Boston-Maine Airways. The airline, now known officially as Pan Am Clipper Connection, served bizarre destinations like Tunica, Mississippi and Elmira, New York. It was dogged by persistent certification problems until its certificate was finally revoked in 2008 amidst allegations of fraud by a senior company official.

Guilford Transportation Industries changed its name to Pan Am Systems in 2006, which is why the Pan Am logo is now found on boxcars rather than jet planes. Still, the company does what seems to be a brisk business selling Pan Am merchandise. There is obviously still a great deal of equity in the Pan Am brand—but that brand equity has failed, on three separate occasions, to translate into a successful airline. The most powerful airline brand in history was not powerful enough.

In fact, this story has been repeated over and over again. After Braniff went bankrupt, it was brought back too. And when its second incarnation went bankrupt, it was brought back again (the third attempt also ended in fraud.) The National Airlines name was used three more times after the demise of the original airline, and its famous Sun King logo was sold twice to airlines with different names.

The most recent attempt to resurrect Eastern isn’t even the first; the first was launched just months after Eastern went under in 1991. The “new Eastern” apparently named an ad agency but never got off the ground.

The most successful revived airline brand is probably Frontier Airlines—and even the new Frontier didn’t escape Chapter 11 in 2008.

It’s not surprising that the elements of an airline’s brand are often sold off when the airline is liquidated. At first they must seem like very valuable assets. But they are almost inevitably tarnished, first by the fact of the bankruptcy and second by the airline’s decline before bankruptcy. The customer experience on Pam Am may have been fantastic in its heyday in the 60s, but by 1991 it probably wasn’t quite the same, and that’s what consumers remember.

The most dangerous effect of launching a new airline with the brand of an old one is a potential feeling of invincibility. Starting an airline is hard. Very, very hard. No amount of borrowed brand equity can affect an airline’s fuel prices, or the number of hours it can keep its planes in the air and making money. Anyone who starts to think of an airline’s brand as a silver bullet will also start to get overconfident.

I wish the very best to the people behind the new new Eastern. Perhaps they will reverse the historical trend. Maybe the Eastern hockey stick will fly again (and I for one would be very curious to see how they update it.) But Eastern Air Lines has now been dead for almost 20 years. It might be better to let it rest in peace.