Pan Am's 747 bet: the 1966 order, the Worldport and the 1973 oil shock

Published

2026-11-03

Updated

2026-11-03

Facts checked

2026-10-26

In April 1966 Juan Trippe signed for 25 Boeing 747s at $525 million, the biggest single order in the history of commercial aviation. He was betting on a forecast of 70 percent traffic growth in five years and on an aircraft twice the size of the 707. The jumbo entered service with Pan Am in January 1970, and Pan Am enlarged its Worldport terminal at Kennedy to take it. Then the extra seats met a recession and the 1973 oil shock.

A plane twice the size of the 707

Traffic boomed in the first jet decade, and airports were approaching saturation. So, the Pan Am Historical Foundation writes, the answer could not simply be more aeroplanes. It had to be bigger ones (Pan Am Historical Foundation). When Pan Am thought about a bigger aircraft, it thought not of modest growth but of doubling.

The goal behind it was an old one. In 1943 Trippe had announced that he wanted to fly 150 passengers from New York to London in 10 hours for a one-way fare of $100. Fifteen years later, by the foundation's account, the jets had given him the capacity and the speed; the fare was still to come. How Trippe built Pan Am before the jets is told in the first part of this series.

Boeing had its own reasons to listen. In September 1965, having spent $16 million on the design of a giant military transport, it lost the $2 billion Pentagon contract to Lockheed and the C-5A (TIME, 1966). Pratt & Whitney lost the engine contest (TIME, 1970). "When you lose," said Boeing's president, William Allen, "you look for other opportunities", and Boeing reworked its rejected transport to suit Trippe. The foundation adds that Trippe's persistent demands for a leap in size were what drove the redesign.

In December 1965 Pan Am signed a letter of intent with Boeing. The project tied together Pan Am, Boeing and Pratt & Whitney, and Boeing's design team was led by Joe Sutter (Pan Am Historical Foundation). The result, in the words of the Smithsonian, was an aircraft "designed originally for Pan American to replace the 707", with far lower seat-mile costs and more than twice the 707's passengers (Smithsonian).

The April 1966 order

TIME reported the signing in April 1966 and called the contract the biggest single order in the history of commercial aviation (TIME, 1966); the foundation calls it the biggest commercial aircraft order (Pan Am Historical Foundation).

Twenty-three were to carry up to 490 passengers each, nine or ten abreast with two aisles, and two were freighters able to lift 214,000 pounds, against 76,400 for the Boeing freighters Pan Am then flew. Deliveries were due to begin in September 1969. By the foundation's figures the 747 would be the biggest commercial jet, at 680,000 pounds gross weight, with the biggest jet engines, Pratt & Whitney JT9D turbofans of 41,000 pounds of thrust each, and more than twice the seats of any jet then flying.

Trippe was betting on a forecast. He told reporters that passenger traffic was expected to grow by 70 percent over the next five years, and he called the decision to buy the 747 his most exciting experience at Pan American since the airline began almost four decades earlier. The bet was not quite final. The foundation, citing The New York Times, notes that the two companies had four months to back out; after that there was no turning back.

Not everyone saw the 747 as the future. TIME wrote that some regarded it as little more than an interim aircraft until the supersonic transport arrived, and Pan Am specified that its 747s be built strong enough to be converted into freighters. The magazine also saw what the size could do for fares: a passenger flying from New York to London might one day pay as little as $100. That was Trippe's 1943 number.

Boeing's own gamble

The 747 needed a factory as new as the aircraft. Boeing began building its plant at Everett, Washington, in 1966, and it remains, Boeing says, the world's largest building by volume (Boeing). The Museum of Flight in Seattle writes that the factory went up almost at the same time as the first 747, and that the programme required Boeing to risk much of its net worth (Museum of Flight). Allen said years later that merely recalling the early days of the 747 "brings sweat to the palms of my hands" (Museum of Flight).

TIME counted the cost in October 1968. In the 30 months since Allen had decided to go ahead, Boeing had raised about $1 billion, ordered parts from 1,500 prime suppliers, built a $200 million plant and sold 158 of the $20 million aircraft to 26 airlines, after beating weight problems that at one point threatened the whole programme (TIME, 1968).

The first 747 rolled out of the Everett factory on 30 September 1968, a day ahead of schedule. By then, TIME noted, the airlines had changed their minds about fares. Afraid of not filling 490 economy seats, and of driving their present jets out of business, they had all but abandoned the cheap-fare idea; many were choosing layouts of about 350 seats and filling the rest with lounges and cinema screens. On 9 February 1969 the 747 made its first flight.

The troubles were not over. The aircraft came out 15 tons heavier than the projected 340 tons, Pratt & Whitney had to rush a still more powerful engine, and in January 1970 TIME counted 15 airframes standing without engines outside the plant. Engines already installed lost power in flight, and fuel consumption rose by 5 percent (TIME, 1970). The Museum of Flight says the JT9D "experienced numerous problems in initial service".

Trippe steps down

The man who ordered the 747 did not run the airline that flew it. In May 1968, at the end of a speech at Pan Am's annual shareholders' meeting, the 68-year-old Trippe announced that he was stepping down. His hand-picked successor as chairman and chief executive was the company's president, Harold Gray, 62; Trippe took the title of honorary chairman (TIME, 1968). TIME reminded readers that Pan Am had been the first airline to order the 747.

Trippe had run the company as chairman and chief executive for 41 years, from 1927 to 1968, the Smithsonian's archive notes, and he remained an active member of the board until 1975 (Smithsonian archives). He left, the foundation says, just months before the first 747 flew.

Gray did not last long. In November 1969 he stepped down as chief executive after a year and a half, and Najeeb Halaby, a former head of the Federal Aviation Agency and Pan Am's president for 18 months, took over. Pan Am had just reported a record nine-month loss of $4.5 million, against earnings of $39.5 million a year earlier. TWA had pushed it out of first place on the North Atlantic, and Pan Am had cut 23 unprofitable Pacific flights and announced layoffs of 450 pilots and flight engineers (TIME, 1969).

January 1970: the first flight

Pan Am accepted its first 747, the sixth off Boeing's line, on 12 December 1969. It reached Kennedy Airport the next day, and on 14 December more than 5,000 Pan Am employees and their families came to see it (Pan Am Historical Foundation).

In January 1970 TIME wrote that Pan Am had committed $1 billion to buy 33 jumbo jets and the facilities to handle them, and was "staking its corporate future on the big ship". Kennedy Airport, the magazine added, would not be fully ready for the 747 until 1973 (TIME, 1970).

On 15 January 1970 the first commercial 747 was christened at Dulles Airport outside Washington. Pat Nixon visited the cockpit with the transportation secretary, John Volpe, and Najeeb Halaby (National Archives).

The first scheduled flight from New York to London went wrong from the start. A pneumatic door jammed and took half an hour to reset. Then, as the 747 taxied out, a gust of wind blew into the exhaust of the right outboard engine; the fuel flared up and the engine overheated. The aircraft went back to the terminal, and Pan Am rolled out its only other 747 ready for service. On its nose the name Clipper Victor was painted out and replaced with Clipper Young America, the name of the grounded aircraft (TIME, 1970).

The replacement was the Boeing 747-121 N736PA, under Captain Robert Weeks. According to a 1970 press report quoted by This Day in Aviation, it carried 332 passengers and 20 crew, left New York at 1.52 a.m. (TIME gives 1.50), nearly seven hours late, and touched down at Heathrow at 8.06 a.m. New York time (This Day in Aviation). Boeing dates the 747's entry into service on Pan Am's New York to London route to 22 January 1970 (Boeing).

One passenger, then a boy, later told the foundation about the wait on board and the order to get off for a replacement plane; next to the 747, the 707 he had flown before was "a Tonka toy". The foundation keeps the flight's menu, its cover inscribed: "Clipper Young America arrives in London on the first commercial flight by the new generation of wide-body jets, January 22, 1970" (Pan Am Historical Foundation).

The first week brought more surprises. At Heathrow, unloading the baggage took almost 45 minutes, against 18 in a test, and the Federal Aviation Administration told controllers to keep 747s two to three times the usual distance from other aircraft.

Too many seats

The jumbos arrived in a bad year for the whole industry. In August 1970 TIME reported that American airline profits had fallen from $412 million in 1967 to $55 million in 1969, while the move to wide-bodies had committed the airlines to $10 billion of spending. The jumbos flew well filled, but they drew passengers away from the smaller jets, and the share of seats filled was falling (TIME, 1970). Pan Am lost $19.6 million in the first half of 1970. After the Civil Aeronautics Board let six rivals onto the West Coast to Honolulu route, it cut its flights there from 80 a week to 40 and dismissed 378 flight crew.

By October 1971 the losses had a pattern: $26 million in 1969, $48 million in 1970 and $39.5 million in the first half of 1971. The jumbo jets, TIME wrote, had added seats just as the economic downturn cut the number of passengers (TIME, 1971). Pan Am also had no domestic routes to feed its international flights, while TWA could carry a passenger "from Tulsa to Tel Aviv" in its own aircraft. The same gap runs through the story of why Pan Am failed.

The money itself was expensive. Pan Am was paying up to 11.25 percent interest on the loans for its 747s, and to break even it had to fill 54 percent of its seats, against 48 percent for TWA. Among its loss-makers TIME named the New York to Moscow service it had opened in 1968; how that route came about is told in Aeroflot in the 1960s.

The foundation writes that Pan Am's 747s brought down the cost of long-distance travel once again, and that other wide-bodies followed, with "plenty of cut-throat competition" (Pan Am Historical Foundation). The Smithsonian adds that in the 1970s Pan Am's level of service faltered and the airline began to lose passengers. In 1972 Halaby was ousted, and William Seawell took over (TIME, 1974).

The Worldport

The 747 also outgrew Pan Am's own building at Kennedy. The terminal went back to 1955, when the Port Authority of New York and New Jersey redrew the plan of the airport, then called Idlewild, as an archipelago of terminals around a central area; Pan Am used its allotment of 16 acres for a building of its own. Designed by Tippetts-Abbett-McCarthy-Stratton, with Walther Prokosch as architect, it sat under a "parasol" of cantilevered concrete held by cables and opened to good reviews in May 1960 (Pan Am Historical Foundation). It had been designed for piston aircraft, and even the 707 forced changes to the plans.

The 747 forced a much bigger one. There was nowhere to build but out onto the apron, and a huge trapezoidal concourse was added, with room for three jumbos on each side. Architects were not kind to it: Progressive Architecture likened the new Worldport to a large subway station.

The Port Authority spent $150 million on roadways, taxiways and bridges able to take the big aircraft, and the International Arrivals Building got 12 new loading bridges. The enlarged Worldport had 16 gates, eight of them for 747s, 52 check-in counters, six restaurants and two cocktail lounges on four levels, more than three-quarters of a million square feet on 45 acres. The foundation calls it the largest terminal in the world operated by one airline (Pan Am Historical Foundation). Work began in 1971, and the extension was in use from June 1973.

The formal dedication came on 5 December 1973. Pan Am's chairman, William Seawell, gave a lunch for 200 guests, and Trippe, now honorary chairman, spoke: "The jet has successfully outraced the Atom Bomb." To that, he said, the Worldport should be dedicated. The foundation calls the timing ironic. The airlines were reeling from the oil embargo imposed by OPEC after the Arab-Israeli war earlier that year, and while it celebrated the Worldport, Pan Am was cutting flights and furloughing pilots under a national order to sharply reduce fuel use. The building was torn down in 2013; the last flight to leave it, in May 2013, was a 747.

The oil shock

Fuel turned a recovery into another loss. Until the last quarter of 1973 Pan Am had been heading for its first profitable year since 1969. Then the price of jet fuel jumped by 8.8 cents a gallon, to 23.3 cents, adding $31.4 million to the bills of those three months, and the year ended with a loss of $18.4 million (TIME, May 1974). For 1974 Pan Am expected fuel to average more than 35 cents a gallon and to cost $204 million more. Without government help, Seawell forecast, Pan Am could lose another $85 million, its biggest loss ever, and together with TWA it asked Congress for subsidies of up to $360 million for the two airlines.

By September 1974, TIME reported, 8,000 of Pan Am's 40,000 employees had been dismissed. In August the airline said it needed an immediate subsidy of $10.1 million a month just to keep going, and the Department of Transportation was pressing Pan Am and TWA to merge, which neither wanted. Pan Am called the subsidy it sought a "national interest payment" (TIME, September 1974).

No subsidy came, from the Civil Aeronautics Board or the White House, in 1974 or 1975 (International Directory of Company Histories). In February 1975 TIME wrote that Iranian banks were preparing a loan of up to $250 million to an airline that had lost an estimated $75 million in 1974 (TIME, February 1975). By August the Iranian deal, now put at $300 million, appeared to have fallen through. Pan Am had lost $59 million in the first quarter of 1975, cut 3,100 jobs and lowered its break-even point from 58 percent of seats filled to under 50 percent (TIME, August 1975).

Then the numbers turned. In the third quarter of 1975 Pan Am earned $42.1 million, against a loss of $500,000 a year earlier. It had cut its fuel bill by $30 million by dropping unprofitable flights, laid off more than 2,000 people, about 10 percent of its staff, and swapped routes with TWA and American, ending head-to-head competition to more than a dozen major overseas cities (TIME, November 1975).

The 747SP: nonstop to Tokyo

The 747 had one more chapter at Pan Am. TIME noted in November 1975 that to compete in growing markets such as New York to Tokyo, Pan Am would soon need longer-range aircraft such as the 747SP. Pan Am had asked Boeing for a version that could fly the 6,754 miles between New York and Tokyo nonstop with a full load. Boeing shortened the fuselage by 46 feet, cutting capacity to 233 passengers, added fuel and took 17 tons out of the weight. The 747SP, for Special Performance, had a range of 7,000 miles and flew the route in 13 hours (Pan Am Historical Foundation).

In 1976 Pan Am began flying the 747SP nonstop from New York to Tokyo and from San Francisco to Hong Kong (University of Miami Libraries).

The SP also set records. On 3 May 1976 a 747SP-21 commanded by Walter Mullikin completed an eastbound flight around the world, from New York by way of New Delhi and Tokyo and back, at an average of 809.24 km/h, a speed record recognised by the FAI (FAI). On 28 October 1977 Mullikin and his crew flew a 747SP around the world over both poles, from San Francisco by way of the North Pole, London, Cape Town, the South Pole and Auckland, at 784.31 km/h (FAI). The foundation calls it Pan Am's 50th anniversary flight.

Half a century on, the foundation judges Trippe's dream of mass air travel "a gamble that paid off", pointing to the millions who have flown on his "dreamliner". For Pan Am the 747 years were costly. A company history counts $364 million of losses from 1969 to 1976 and more than $1 billion of debt; Seawell cut the network by 25 percent and the staff by about 30 percent, and the first profit in nearly a decade came only in 1977, with the help of tax-loss credits (International Directory of Company Histories). The rest of the company's story is told in the Pan Am series.

Fly an airline of 1965

• Era: Jet Boom, 1965
• Base: New York, JFK
• In the catalog: Boeing 747-100, from 1970

Start in 1965

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