THE INTERVIEW: REMEMBERING PAN AM: JEFF KRIENDLER (PART 1 OF 2)

Pan Am and Boeing created the Boeing 747

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NOTE FROM MICHAEL: Hard as it is to believe, on December 4th the 15th anniversary of the shut-down of Pan American World Airways came and went. The news media--from CNN to USA Today and others have taken note. And with my involvement as a 14-year member of The Pan Am Historical Foundation, I am really very lucky to call the people featutured in this special week-long tribute on THE INTERVIEW my friends. I have edited 37 single-spaced pages down to a readable (and hopefully eye-opening) look at an American institution whose logo was once the second-most recognized symbol of American culture worldwide next to that of Coca-Cola. Pan Am's story is very complex. But a brief explanation about Pan Am's problems would be helpful here before I introduce our first Guest, Jeff Kriendler.

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When the Civil Aeronautics Board (CAB) was phased out after President Carter signed the Airline Deregulaction Act in 1978, there were two clauses. "Clause A" allowed all domestic carriers (such as American, United, Eastern, Delta, Continental and Northwest) to fly International routes. Up to this point, Pan Am was the only International carrier (although in the 1940's TWA was given some overseas routes). Curiously, Pan Am for decades was prevented from developing a Domestic Route System that would provide a logical "feed" into it's tremendous International route network. This bi-partisan effort amounted to a virulent hostile government action undertaken by the U.S. Government preventing Pan Am from flying within the United States! "Clause B" was the second of the two clauses drafted specifically to allow Pan Am to fly domestically. "Clause A" was energized. However, "Clause B" was never activated. When the remaining 17 U.S. airlines banded against Pan Am, they lobbied the U.S. Congress stating that Pan Am would monopolize the airways. While the legislation existed, Pan Am never benefited from it, and this ultimately led to the agonizing and lengthy demise of Pan Am. Nor would Washington policymakers permit a merger for Pan Am. There is but little doubt today that had Pan Am and a number of suitors (from TWA, Eastern and American Airlines--to cite a few) been allowed to merge years ago, Pan Am would still be flying today! Despite Pan Am's many sacrifices that paralleled the industrial growth of the United States from the airline's humble beginnings in 1927, Washington Democrats and Republicans alike permitted only two mergers for Pan Am: 1950's absorbtion of American Overseas Airways from American Airlines, and in 1980, the ill-fated acquisition of National Airlines--a medium sized carrier that flew basically three corners of the United States---California, Florida and New York. In a desperate to acquire a domestic route system, Pan Am purchased National Airlines just as the old CAB was being phased out. It proved to be a billion dollar disaster that Pan Am never really seemed to recover from. Now onto our next Guest!

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With the decision of Delta Air Lines in late 1991 to withhold the final installment of $25 million of the $140 million that was pledged to capitalize a scaled-down Pan American World Airways serving the Latin American market from Miami, the company collapsed at 9:00 a.m. E/T on December 4, 1991. Immediate action was required to rescue the airline's archives and memorabilia from a bankruptcy court-imposed deadline to auction off Pan Am's assets. A group of concerned employees realized that their very birthright was imperiled. So, a working committee composed of Kathleen Clair (personal secretary to Pan Am Founder and Chief Juan Trippe), Paul Roitsch, Jeffrey Kriendler, Norman Blake, Everett Goulard, Jim Leet, Jim Montgomery, Jerry O'Donnell and Charles and Edward Trippe (sons of Juan Trippe) was assembled to develop a daring rescue plan. However, the group soon realized that they lacked the legal structure to move forward.

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Eventually, the Pan Am Historical Foundation was created thorough a merger of interests with Flight Spectrum, a Florida-based non-profit organization established by a group of 'Clipper Pioneers' led by George Price, Eugene Banning, Dave Abrams, Howard Ashcraft, Kevin Keith and W.L. Witherspoon.

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As the deadline for acquiring the voluminous amount of artifacts and materials (including but not limited to 11,000 boxes of documents) neared, the new board identified those who shared their common vision to preserve these precious items. Among them, Thomas Watson, chairman of IBM, and Al Uelchi, chairman of Flight Safety, provided immediate financial support as did the University of Miami's Otto G. Richter Library, and the Historical Association of Southern Florida. As we have just recently passed the 15th Anniversary date of the Pan Am shutdown, "THE INTERVIEW" gathered together five original members of Pan American World Airways for a remarkable glimpse into the many historical events of yesteryear and modern day alike. What follows is a story from those who were not merely inside Pan Am during the beginning of the "Jet Age", but remained to the darkest hours of its heartbreaking demise. It is also the story of how those precious documents and artifacts were salvaged, and the challenge facing the Foundation to inspire younger members to carry forth the beacon of Pan Am's legacy today. This author joined the Foundation in 1992.

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JEFF KRIENDLER

Vice President of Corporate Communications

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Throughout the 1980's, Jeff Kriendler was the public's impression of Pan Am. From 1968 to 1991, Kriendler lived through every highpoint and tragic blow visited upon "The World's Most Experienced Airline". From a front-line in-flight supervisor, Kriendler worked his way to become a director and vice president of corporate communications. Kriendler shares his 'behind the scenes' story surrounding the birth of an institution whose mission is to preserve the legacy of Pan Am for future generations: The Pan Am Historical Foundation.

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MM: Your mission today on the board of The Pan Am Historical Foundation is as compelling as your career at the airline. Let's work backwards a bit.

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KRIENDLER: I was one of only many driving forces behind the creation of the foundation, although I am the one person who transitioned from the living Pan Am to the Pan Am as post-,mortem. I was the vice president of corporate communications from early in the Eighties. But for the last ten years, I was the public face and voice of the company; I was the spokesman. I entered Pan Am on July 1, 1968. It was right after Juan Trippe retired. But of course Juan Trippe left his legacy and Trippe was Pan Am and was such a pivotal force in the industry. Pan Am, driven by Juan Trippe, shrunk the globe. Their boldness---their pioneering spirit, really, brought the world together. The reason that I joined Pan Am, and the reason so many other people wished to join Pan Am was that Pan Am was the leader. Pan Am was the 'Queen of Aviation and it enjoyed financial success in the Sixties. And that period was, ironically, when it was at the zenith--the point at which it ordered the 747, which of course gave birth to a totally new era of aviation. But it was also one of the reasons, with other factors, that Pan Am began its slide. So, by the time I joined, Pan Am was beginning a very gradual slide to its ultimate demise.

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MM: How did a company like Pan Am that owned its famous New York Building at 200 Park Avenue, the Inter-Continental Hotel chain, Pan Am World Services (that conducted launches at Cape Canaveral), the insurance company, a 50 percent stake in Falcon Jet (the private executive jet builder), the Atlantic Division, the Pacific Division, the Latin American Division, the Internal German Services (Pan Am was the only U.S. airline to fly the IGS with Lufthansa between a divided East and West Germany during the existence of the Berlin Wall), and later the East Coast Shuttle (flown between New York-Boston-and Washington's "power corridor"), Pan Am Express (the commuter airline feeder) simply fall into the abyss?

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KRIENDLER: The company was absolutely number one worldwide in commercial aviation. Now, in the late ixities and in 1970 there was a slowing down of the world's economies and for the first time, a drop in international travel. Pan Am suffered greatly, because just at that time along came all those (Boeing) 747's. Pan Am ordered the first 25 and they arrived in 1970 and 1971. The company then faced the energy crisis and the Yom Kippur War in 1973. And although a short-lived war, the effect was that the oil embargo sent fuel prices from 13 cents a gallon to 34 cents a gallon, and that alone cost around $200 million. Then there was the matter of trying to cut routes, do route swaps (notably with TWA) and try and counter this great crisis. And by the mid-Seventies the company was starting to come back together. Then in 1978, of course, we had deregulation. Pan Am's response to deregulation was --rather than build a domestic network--to acquire National Airlines and this was another big mistake.

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MM: How did Pan Am survive so many tragedies such as Tenerife, or the helicopter accident on the rooftop of The Pan Am Building (both in 1977), and Lockerbie Flight 103 (December 21, 1988) and live as long as it did, Jeff?

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KRIENDLER: First, obviously it was able to survive because of the tremendous base of assets that the company collected through its growth to power and prominence. But during this period it was able to survive---unfortunately---by having to parcel out those assets to raise cash. The sale of the Pacific routes (23% of Pan Am) to United Airlines was incredibly close to the vest. There was definitely a need to do it. Pan Am didn't have the money and had suffered tremendous losses ($281 million in 1981). It had to sell the Inter-Continental hotel company (to Britain's Grand metropolitan Corporation for $500 million) in 1981. The airline suffered huge losses in 1982, although 1983 was a better year. But then in 1984 and 1985 the company suffered terribly and then was stuck with the beginning of terrorism. Europe was struck by the terrible events of 1985 and 1986 with the bombing of airports in Rome and Vienna. Then in 1986 President Reagan retaliated with the bombing of Libya. The summer of 86' was a complete disaster. Terrorism certainly was the end of Pan Am starting in the mid-Eighties. All the eggs were in the Atlantic basket and when the Atlantic went into a deep funk we had to lower fares again to get passengers back. Then Tom Plaskett came aboard. Don't forget that we did make a bid to acquire Northwest. (Pan Am lost a bidding war with ex-oil billionaire Marvin Davis and Marriott financier Al Chechhi). Business began to turn around. What happened? Lockerbie (a bomb planted aboard a Boeing 747 en route from London to New York exploded over Scotland killing 270 people) along with the Gulf War.

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Tomorrow Jeff Kriendler refelcts back on the many good times at Pan Am.