Pan American-Grace Airways informations and photos

Pan American-Grace Airways, also known as Panagra, and dubbed "The World's Friendliest Airline" was an airline formed as a joint venture between Pan American World Airways and Grace Shipping Company. On September 13, 1928, a small single-engine Fairchild airliner flew from Lima, Peru, to Talara, Peru, which marked not only the beginning of Pan American Grace Airways but also the inauguration of scheduled air transportation along the West Coast of South America. From this short flight in 1928 to nonstop flights from New York to South America with Douglas DC-8 Intercontinental Jets in 1966, Panagra became the standard-bearer for transportation between the US Mainland East Coast and the West Coast of South America for 39 years. The "World's Friendliest Airline" merged with Braniff International Airways in 1967, and the combined carrier became the largest US airline serving South America.

In June 1928, Pan American Airways Corporation, originally known as Aviation Corporation of the Americas, was formed for the primary purpose of obtaining the necessary capital to enable its operating subsidiary, Pan American, to bid for various foreign airmail contracts to Latin America. These contracts were soon to be announced by the US Postmaster General pursuant to the Foreign Air Mail Act of 1928 and it was Pan American's belief that it would be ultimately conducting operations under any contracts that might be awarded.

Pan American was correct and during May and July 1928, the new company had three foreign airmail contracts bestowed for service to Latin America. Specifically, Pan American was awarded the contract for Foreign Air Mail Route (FAM) No. 5 for service between Miami and Panama in the Canal Zone. Interestingly, Pan American had already strategically decided that if it received FAM 5 then it would ask for extension services beyond the Canal Zone to and along the Western Coast of South America. The New York-based airline had also promulgated operating rights into Colombia, Panama, Ecuador and Peru, and had also purchase sufficient aircraft to operate the route system.

Aviation Corporation of America's operating subsidiary, Pan American World Airways, operated only twelve aircraft with 100 employees, while AVCO's entire capitalization was only US$3,775,000, at the end of 1928. The developments of 1928 introduced the auspices for the formation of a new company formed under the laws of Delaware. Pan American entered into an agreement with W. R. Grace and Company to operate airline operations into Peru, which was outlined in two letters of intent dated August 31, 1928, and September 7, 1928. Under this agreement, both companies subscribed to US$25000 of new capital stock in the new Panagra company, which would jointly study the possibility of operating air carrier and mail services between the Canal Zone and Valparaiso, Chile. If AVCO were to determine that it would be beneficial to bid on a mail contract for this type of service then W. R. Grace's initial contribution would be treated as stock in the new company giving W. R. Grace the option to obtain an interest in the new venture not to exceed 50 percent of its capitalization.

Also, the agreement stated that Pan American would have full responsibility for the operation of the air carrier services, while W. R. Grace operations in cities along the proposed new route would act as agents for the new company, which was incorporated as Peruvian Airways Corporation. In September 1928, both companies contributed US$25,000 in capital to Peruvian Airways, forming a 50/50 partnership. On January 31, 1929, the US Postmaster General issued need for a contract for Foreign Air Mail Route No. 9, which would extend from Panama extending down the West Coast of South America to Santiago, Chile, with an option for the Postmaster General to offer extension services from Santiago across the lower belt of the Andes Mountains to Buenos Aires, Argentina, and beyond to Montevideo, Uruguay.

On February 21, 1929, Pan American World Airways and W. R. Grace and Company announced the formation of Pan American Grace Airways, Inc., to bid on the new airmail contract. The new company bid on the contract and both partners subscribed US$500,000 each to the capitalization of the new Pan American Grace company, which also included the original amounts subscribed to the original operating entity, Peruvian Airways Corporation.

Pan American and W. R. Grace's new operating entity, Peruvian Airways Corporation, purchased its first aircraft on August 1, 1928. The new airliner, a Fairchild P-1 monoplane, featured a cabin for four passengers and was powered by a Wright Whirlwind engine with an output of 220 horsepower. Five weeks later on September 13, 1928, the new Fairchild P-1 inaugurated the first scheduled commercial flight along the West Coast of South America, with a nonstop flight from Lima, Peru, to Talara, Peru, carrying both passengers and mail.

The little Fairchild carried just a few letters and a full load of four passengers on the inaugural flight, which departed from a race track in Lima. Upon arrival in Talara, the legend-making airliner landed at an "airport" in Talara that was a soccer field. In spite of these drawbacks, Pan American Grace Airways first flight had been successfully completed without incident.

Armed with a new Foreign Air Mail Act of March 2, 1929, which modified the 1928 Act by allowing the US Postmaster General to pay air carriers for transportation from foreign countries to the United States in addition to the outbound direction and the Postmaster-General could further amend Foreign Air Mail contracts issued via the Act of 1928 with the same new provisions. On the same date, the Postmaster General awarded Pan American Grace with Foreign Air Mail Contract No. 9.

It was an interesting fact that several other carriers had also bid on the new Route 9 and several had bid lower than Panagra. However, the Postmaster General noted that it was his discretion as to what carrier is ultimately selected. The Postmaster General stated that Pan American's experience in the region put it well ahead of the other bidders and was therefore the lowest "responsible bidder" that could satisfactorily serve the needs of the government. It was found by the Postmaster-General that Pan American had spent two years in preparing for the new route down the West Coast of South America and the company's successful operation of service in the Caribbean as well as the significance of the infrastructure already in place along the proposed routes along the West Coast that were in operation and in place by W. R. Grace and finally the financial abilities of Pan American and W. R. Grace played an additional significant role in the award.

On July 12, 1929, Pan American Grace inaugurated its first service over FAM Route 9. However, until the end of 1929, Pan American operated the route as far south as Guayaquil, Ecuador, which included the use of PAA aircraft and personnel.

On October 12, 1929, only 13 months after its first history-making first flight, Panagra inaugurated successful commercial flight across the Andes Mountains. Pan American Grace's Ford Trimotor airliner departed Buenos Aires, Argentina, and headed toward Chile. The venerable Ford flew over the flat pampas and then landed at Mendoza, Argentina, where it refueled and prepared for the next leg of the trip.

Back in the air, the Trimotor crossed the Cordillera of the Andes and then through Uspallata Pass where it crossed at an unheard of altitude of 18,000 feet. Having left the Argentine capital city eight and one-half hours earlier, the aircraft landed at Santiago's Los Cerrillos Airport.

Braniff Airways Cofounder and President Thomas Elmer Braniff called the Civil Aeronautics Act of 1938, the Magna Carta of Aviation because it revolutionized the entire industry into a cohesive whole that gave prominence to the air carriers in the United States. The Act, signed into law on June 23, 1938, transferred the responsibility of non-military aviation from the Bureau of Air Commerce to the newly formed Civil Aeronautics Agency to oversee the operation of all of the nation's airlines including for economic reasons as well as safety needs and requirements. Airlines were now required to be issued a Certificate of Public Convenience and Necessity to prove that their service was viable to the nation's air travel needs.

Upon enactment of the Act, it was immediately recommended that Pan American and Pan American Grace Airways be issued this certificate. Both carriers now operated a "circle" of service all the way around South America and their viability was more crucial than ever before. Pan American noted that the two carrier's services were meant to be complementary rather than competitive and in nearly every instance they were. Specifically, a large percentage of Pan American's traffic carried from the Canal Zone to the United States Mainland was as a result of flow-thru traffic from Pan American Grace destinations along the West Coast of South America to the Canal Zone and the same for Pan American Grace from Pan American's southbound operations to the Canal Zone. The certificates were issued almost immediately by the new CAA.

Panagra's network stretched from Panama and the U.S.-controlled Panama Canal Zone to Santiago, Chile and Buenos Aires. It was founded in 1929 to compete with SCADTA, a German-owned company, and held a quasi-monopoly over air travel in parts of Colombia and South America during the 1940s and 1950s.

In 1939, a passenger traveling from the U.S. to Buenos Aires would board a Pan Am Sikorsky S-42 flying boat at Miami and fly to Colon, Panama in the Canal Zone, stay overnight and then board a Panagra Douglas DC-2 or DC-3 and fly to Buenos Aires with overnight stops in Guayaquil, Arica and Santiago. This routing was a full day faster than the Pan Am service operated via the coast of Brazil. The one-way fare from Miami to Buenos Aires was US$550 (equivalent to $11,070 in 2020).After World War II, airliners could operate at night over South America, and in 1947 Panagra Douglas DC-6s made scheduled flights from Miami to Buenos Aires in 20 hours and 25 minutes.

Pan Am crewed the DC-6 south across the Caribbean to Albrook Field, near Balboa, Panama where Panagra flight crews took over. In 1949, Panagra flights serving Panama shifted to Tocumen Airport. In 1955, Panagra Douglas DC-6Bs and DC-7Bs began serving Washington DC and New York City with these flights being operated by National Airlines crews north of Miami. In 1957, the Panagra DC-7B service via Lima was several hours faster from New York Idlewild Airport (later renamed JFK Airport) to Buenos Aires than the Pan Am DC-7B service operated via Rio de Janeiro.

Invariably, the admitted complementary services of Pan American and Pan American Grace would begin to create situations that were on the verge of triggering anti-trust violations. It was the era of the late 1940s and a series of agreements between Pan American and Panagra that set in motion a battle that would not end until Pan American Grace merged with Braniff Airways in February 1967. In 1946, Pan American proposed to the Civil Aeronautics Board (formed 1940 to take over airline economic and route cases) that certain Pan American Grace aircraft would be chartered to PAA and operated by PAA over certain routes north of the Panama Cana Zone and more specifically between there and the Miami, Florida gateway. What this created was a convenient thru-plane service for passengers traveling between PAA and Panagra routes.

This agreement, known as the Through-Flight Agreement was approved by the CAB in 1947. Another key part of this agreement also provided for the eventual extension of this agreement beyond Miami to New York City should Pan American ever be approved to operate this particular route segment. Accordingly, in 1949, Pan American and Panagra entered into an agreement with Miami-based National Airlines, Inc., which enabled Pan American Grace Airways aircraft to be chartered to National for operation over its route between Miami and New York, thereby creating single-plane service from Buenos Aires to New York. National Airlines decided to leave the agreement in 1950 and PAA and Panagra then entered into a similar agreement with Miami-based Eastern Airlines over the same Miami-New York route. It was placed before the CAB in 1951 but ultimately, an interchange agreement was awarded to Eastern and Braniff for flights between New York and South America.

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