Pan American-Grace Airways
| Company type | Joint venture |
|---|---|
| Industry | Airline |
| Founded | September 13, 1928 |
| Founder | Pan American World Airways, Grace Shipping Company |
| Defunct | 1967 |
| Fate | Merged with Braniff International Airways |
Area served | Western coastline of South America, US East Coast to South America |
| Products | Air transport services |
Number of employees | 100 (1928) |
| Parent | Pan American World Airways, Grace Shipping Company |
Pan American-Grace Airways, commonly known as Panagra, was a collaborative airline enterprise formed by Pan American World Airways and Grace Shipping Company. Established on September 13, 1928, with its maiden flight operating between Lima and Talara, Peru, Panagra was a trailblazer in scheduled aviation along the western coastline of South America. Over nearly four decades, it became the leading airline linking the US East Coast with South America, incorporating state-of-the-art aircraft such as the Douglas DC-8 by 1966. In 1967, the company merged with Braniff International Airways, resulting in the largest American carrier serving South American routes.
Establishment of Pan American Grace Airways
In June 1928, Pan American Airways Corporation was created to raise funds for competing in Latin American airmail contract bids under the Foreign Air Mail Act of 1928. By mid-year, Pan American had secured important contracts, including Foreign Air Mail Route No. 5 between Miami and Panama. With a strategic vision to extend services along South America's Pacific coast, Pan American obtained operating rights in Colombia, Panama, Ecuador, and Peru, and procured aircraft to support these routes.
By the close of 1928, Pan American World Airways operated a fleet of twelve planes with a workforce of 100 employees and capital stock valued at US$3.78 million. To enter the Peruvian market, Pan American formed a partnership with W. R. Grace and Company through agreements finalized in August and September 1928. Each company invested US$25,000 to create Peruvian Airways Corporation as an equal joint venture aimed at developing air carrier and mail services between the Canal Zone and Valparaiso, Chile. Operational control was managed by Pan American while W. R. Grace handled local agency functions.
On January 31, 1929, the US Postmaster General announced Foreign Air Mail Route No. 9, extending from Panama down the western coast to Santiago, Chile, with possible expansions to Buenos Aires and Montevideo. Subsequently, on February 21, 1929, Pan American and W. R. Grace formally incorporated Pan American Grace Airways, Inc., with a capitalization of US$1 million split evenly between them. This new entity absorbed Peruvian Airways’ operations to bid for the Route No. 9 contract and broaden its presence throughout South America.
Inaugural Scheduled Flights
The joint venture between Pan American and W. R. Grace, operating as Peruvian Airways Corporation, took delivery of its first aircraft on August 1, 1928. The Fairchild P-1 monoplane—equipped with a 220-horsepower Wright Whirlwind engine and seating four passengers—commenced the initial scheduled commercial flight on September 13, 1928. This pioneering nonstop route connected Lima with Talara, Peru, transporting both passengers and mail.
Although infrastructure was rudimentary—departing from a racetrack in Lima and landing on a soccer field in Talara—the flight represented a significant operational achievement for Pan American Grace Airways.
Granting of Panagra's Initial Foreign Air Mail Contract
Following the enactment of the Foreign Air Mail Act on March 2, 1929—which expanded the authority of the US Postmaster General to award contracts for international inbound and outbound mail—Pan American Grace secured Foreign Air Mail Contract No. 9.
Despite several competitors submitting lower bids for Route No. 9, the Postmaster General awarded the contract to Panagra due to its substantial regional expertise, established operational infrastructure along South America's West Coast, demonstrated reliability in Caribbean operations, and robust financial support from both Pan American and W. R. Grace. These attributes qualified Panagra as the lowest responsible bidder capable of consistently meeting government service requirements.
Launch of FAM Route 9
Pan American Grace initiated operations on FAM Route 9 on July 12, 1929. At the outset, flights extended only as far south as Guayaquil, Ecuador, with Pan American aircraft and crews managing the service through the end of that year.
Pioneering Andes Flight
On October 12, 1929, merely 13 months after its first flight, Panagra achieved the inaugural commercial crossing of the Andes Mountains. The Ford Trimotor aircraft of Pan American Grace departed from Buenos Aires, Argentina, traversing the pampas to Mendoza for refueling. It then proceeded over the Andes via Uspallata Pass at an altitude of 18,000 feet, ultimately touching down eight and a half hours later at Santiago's Los Cerrillos Airport.
The "Magna Carta" of Aviation Regulation
Thomas Elmer Braniff, cofounder and president of Braniff Airways, referred to the Civil Aeronautics Act of 1938 as the "Magna Carta of Aviation" due to its transformative effect on U.S. civil aviation by consolidating airline oversight under the Civil Aeronautics Agency. Enacted on June 23, 1938, this legislation mandated that airlines secure Certificates of Public Convenience and Necessity to verify their economic soundness and adherence to safety standards.
In the wake of this Act, recommendations were made for Pan American and Pan American Grace Airways to obtain these certificates. Both carriers operated complementary routes around South America and experienced significant connecting traffic between Pan American Grace’s West Coast South America destinations and Pan American’s Canal Zone services, thereby strengthening their market presence and operational collaboration. Pan American-Grace received its certificate on July 22, 1940, with retroactive effect from August 22, 1938.
1939 Air Travel from the US to Buenos Aires
By 1939, Panagra’s route network spanned from Panama and the U.S.-controlled Panama Canal Zone down to Santiago, Chile and Buenos Aires. Established in 1929 as a competitor to the German-owned SCADTA, Panagra dominated air travel in sections of Colombia and South America throughout the 1940s and 1950s.
Travelers journeying from the United States to Buenos Aires in 1939 would board a Pan Am Sikorsky S-42 flying boat in Miami bound for Colon, Panama, spend the night there, then continue on a Panagra Douglas DC-2 or DC-3 with stops at Guayaquil, Arica, and Santiago. This itinerary was a day shorter compared to Pan Am’s route via Brazil. The one-way ticket from Miami to Buenos Aires cost US$550 (). Following World War II, nighttime flights over South America became feasible; by 1947, Panagra’s Douglas DC-6 aircraft completed Miami-Buenos Aires journeys in just 20 hours and 25 minutes.
Pan Am flight crews operated DC-6s southward across the Caribbean to Albrook Field near Balboa, Panama, where Panagra personnel assumed control. In 1949, Panagra relocated its Panama operations to Tocumen Airport. By 1955, Panagra’s fleet of Douglas DC-6Bs and DC-7Bs serviced Washington DC and New York City routes, with National Airlines crews managing flights north of Miami. By 1957, Panagra’s DC-7B flights routed through Lima were several hours quicker from New York’s Idlewild Airport (later JFK) to Buenos Aires than competing Pan Am services via Rio de Janeiro.
Building the Pan American Grace Powerhouse
By the end of the 1940s, overlapping operations between Pan American and Pan American Grace raised antitrust issues. This led to a series of arrangements between the two carriers, ultimately resulting in Pan American Grace merging with Braniff Airways in February 1967. In 1946, Pan American submitted a proposal to the Civil Aeronautics Board (CAB) to charter certain Pan American Grace aircraft for use on routes north of the Panama Canal Zone, specifically linking that area with Miami—establishing a thru-plane connection between Pan American and Panagra services.[1]
The CAB granted approval for this Through-Flight Agreement in 1947, with plans to extend service beyond Miami to New York pending Pan American’s authorization for that segment. By 1949, Pan American and Panagra collaborated with Miami-based National Airlines to charter planes for the Miami-New York corridor, enabling nonstop service from Buenos Aires to New York on a single aircraft. After National Airlines withdrew from the partnership in 1950, Pan American and Panagra secured a similar arrangement with Eastern Airlines for the same route. Although this interchange service proposal was submitted to the CAB in 1951, the thru-flight rights between New York and South America were eventually awarded to Eastern and Braniff instead.[1]
Panagra’s Pathway to Braniff Airways
Since Braniff commenced South American West Coast operations in June 1948, Panagra had been its primary rival in that region. Established in 1928—the same year Braniff was founded—Panagra resulted from merging Peruvian Airways and Chilean Airways. The enterprise, known as Pan American Grace Airways, Inc., was jointly owned by Pan American World Airways and W. R. Grace and Company, a significant South American shipping corporation.
By 1953, the Civil Aeronautics Board pressed Pan Am to divest its interest in Panagra due to its overwhelming influence on US-Latin America air traffic. In 1964, Braniff President Charles Edmund Beard negotiated a $22 million bid to acquire Panagra, which included an $11 million offer for W. R. Grace’s half-share, while discussions with Pan Am over its portion continued. However, Juan Terry Trippe, founder of Pan Am, declined the proposal, delaying the consolidation. Further postponement occurred following Braniff’s leadership changes in April 1965.
Pan Am encountered antitrust scrutiny for limiting Panagra’s expansion northward; while Panagra operated routes from Panama southward along the West Coast serving major cities such as Lima, Santiago, and Buenos Aires, Pan Am flew northbound from Panama toward Miami. A federal court found that Pan Am breached the Sherman Antitrust Act by restricting Panagra’s growth and mandated divestment of its holdings. The Supreme Court subsequently deferred jurisdiction over the matter back to the CAB.
In December 1965, Braniff acquired W. R. Grace’s 50% stake in Panagra for $15 million and obtained Pan Am’s remaining half in March 1966 for an equal amount. The CAB sanctioned the merger in July 1966, enabling Braniff to strengthen its market position and broaden its international reach along South America’s western coastline.
Panagra Integrates into Braniff International
On February 1, 1967, Braniff International completed its merger with Pan American Grace Airways (Panagra), acquiring the well-established South American West Coast airline, which had been in operation for 39 years. The transaction was valued at US$30 million and involved purchasing the company from W. R. Grace and Company alongside Pan American World Airways. Braniff’s Executive Vice President, Charles Edward Acker, orchestrated the acquisition through two separate payments of $15 million each in January 1967, thereby finalizing the deal.
This purchase encompassed Panagra’s existing fleet of DC-8-31 jets, as well as prepaid deposits amounting to $27 million for five DC-8-62 Intercontinental jets that were scheduled for delivery to Braniff beginning in the summer of 1967. The adjusted purchase price of $30 million reflected these newer aircraft and deposits, contrasting with an earlier proposal of $22 million that only covered older planes.
The merger received approval from President Lyndon B. Johnson in October 1966, with Braniff officially signing the purchase agreement by January 19, 1967. Following the merger, the combined airline operated approximately 30 weekly flights to South America and also acquired Panagra’s interest in the Peruvian airline Faucett.
Braniff’s Chairman, Harding L. Lawrence, described this acquisition as a significant milestone in air travel between North and South America. He emphasized intentions for swift integration and restructuring. The consolidation brought together nearly 10,000 employees under a unified management framework designed to enhance operational efficiency and strengthen Braniff’s presence in Latin American markets.
Service Highlights and Aircraft from the Merger
As a result of the merger, new nonstop through-flights were established from San Francisco and Los Angeles to Lima, La Paz, and Santiago, removing the need for passengers to change planes in Panama City. Additionally, nonstop service was initiated between Santiago, Chile, and Miami, Florida.
Flight timetables were adjusted to avoid overlapping departures that had previously occurred when Braniff and Panagra operated independently, thereby improving passenger convenience. Service coverage to South America was broadened by adding five U.S. gateway cities: New York, Miami, Houston, Los Angeles, and San Francisco.
Through this acquisition, Braniff took possession of seven used aircraft and secured five new orders. Panagra’s fleet consisted of two Douglas DC-7B aircraft (which were quickly retired), one DC-8-55F Jet Trader freighter (leased since 1966), four DC-8-31 jets, along with five ordered DC-8-62 Intercontinental jets. The DC-8-31s were re-registered under Braniff with tail numbers N1800, N1801, N1802; one retained its original registration.
Painting the Panagra Fleet in Flying Colors
The DC-8-55F Jet Trader (N1590U) was also re-registered under Braniff ownership. Initially, all five DC-8 aircraft maintained Panagra’s green and yellow paint scheme but replaced Pan American Grace logos with black Braniff International titles. The feather emblem on the tail was substituted with a large black Alexander Girard-designed BI logo.
Starting in May 1967, four DC-8s were repainted according to the 1967 Girard/Harper and George solid color palette: N1800 received a dark Panagra green finish; N1801 was painted orange; N1802 adopted a dark blue hue; and the Jet Trader also took on an orange livery. As new DC-8-62 Intercontinental jets arrived between August and December 1967, the older DC-8-31 models were gradually retired. These newly delivered Series -62 aircraft featured an updated 1967 color scheme inspired by Panagra’s original green and yellow tones but did not implement the initially proposed Panagra concept design.
Pioneering Jet Operations in South America
Panagra embraced the jet era in 1960 by introducing the Douglas DC-8-31 jetliners into its fleet. By mid-1966, the airline was operating DC-8 "El Inter Americano" services that linked various Latin American cities with major U.S. gateways such as Los Angeles, Miami, New York City, and San Francisco. During this period, Panagra partnered with National Airlines and Pan Am to offer routes between the United States and Latin America. Prominent destinations on these routes included Antofagasta, Chile; Buenos Aires, Argentina; Cali, Colombia; Guayaquil, Ecuador; La Paz, Bolivia; Lima, Peru; Panama City, Panama; Quito, Ecuador; and Santiago, Chile.
Braniff's Management of South American Routes Post-1983
Following the 1967 merger of Panagra with Braniff International Airways, Braniff operated these South American routes until 1982. Subsequently, Eastern Air Lines took over Braniff’s South American operations. In 1990, these routes were transferred to American Airlines after it acquired them from Eastern, reflecting notable changes in market dynamics and strategic airline positioning.
Revival of the Panagra Brand
In the late 1990s, a new airline resurrected the Panagra name, operating a fleet of Boeing 727-200 aircraft. This venture aimed to capitalize on the historic recognition and brand equity associated with the original Panagra.
Ownership of Pan American Grace Airways Intellectual Property
The intellectual property rights for Pan American Grace Airways and Panagra are currently held by Braniff Airways, Inc., overseen by the Braniff Airways Foundation based in Dallas, Texas. The airline’s vintage promotional posters, crafted by the J. W. Thompson Agency in Lima, Peru, remain under copyright protection and constitute valuable brand assets exclusively owned by Braniff Airways, Inc.
Accident History
- February 3, 1931 – Fairchild FC-2 NC8023 – While conducting a revenue flight from Buenos Aires, Argentina, this aircraft crashed offshore under circumstances that remain unclear; the fate of those onboard is unknown.
- February 3, 1931 – Fairchild FC-2W2 NC8026 – Operating a mail flight between Arauca, Colombia and Antofagasta, Chile, the plane went down near Caleta Buena over water. Two pilots and eight mail bags were aboard; no injuries occurred. Six mail bags were recovered but the aircraft was declared a total loss.
- February 7, 1931 – Sikorsky S-38B NC306N – On a revenue flight to Cristobal in the Panama Canal Zone, this amphibious aircraft crashed during landing into Bay of Limon at Colon; all occupants survived.
- April 1, 1931 – Ford Trimotor NC8418 – Crashed upon landing during a revenue flight to Ovalle, Chile; all seven passengers and crew survived although the plane was destroyed.
- July 16, 1932 – Ford Trimotor NC403H "San Jose" – Operating a revenue service from Santiago to Buenos Aires with a Mendoza stopover in Argentina, this aircraft crashed in the Andes amid a snowstorm with no survivors. The wreckage was discovered twenty months later.
- March 11, 1933 – Fairchild FC-2W2 NC9723 – This revenue flight crashed near Mendoza, Argentina under unknown conditions; there were no fatalities.
- March 22, 1934 – Ford Trimotor NC407H – Shortly after departing Lima, Peru on a revenue flight, engine failure caused this crash; two pilots and one passenger died while twelve passengers survived.
- June 11, 1934 – Ford Trimotor NC8417 "San Pedro" – Lost during heavy rain near Mar Chiquita Lagoon en route from Mar del Plata to Buenos Aires; six of seven onboard perished including all crew members.
- May 8, 1935 – Lockheed L-5A Vega NC9424 – Crashed in Lima, Peru under undetermined circumstances.
- January 22, 1943 – Douglas DC-3A Flight 9 en route between Santiago and Lima crashed in Arequipa Province resulting in ten passenger and three crew fatalities; one person survived.
- August 23, 1937 – Douglas DC-2-118A NC14298 "Santa Elena" – Crashed and burned north of San Luis during a revenue flight from Mendoza to Cordoba; three crew members lost their lives.
- June 19, 1938 – Douglas DC-2-118A NC14272 "Santa Lucia" – Lost in the Andes while flying from Santiago to Arica with all four onboard perishing; wreckage was located in 1941.
- June 26, 1941 – Sikorsky S-43 NC16928 – Training flight at Rio de Janeiro Santos Dumont Airport ended with a crash into Guanabara Bay; aircraft destroyed but all four crew survived.
- Unknown date in 1942 – Douglas DC-2-118A NC14292 "Santa Silvia" – Revenue flight between Arequipa and Lima crashed en route; all five occupants survived.
- January 22, 1943 – Douglas DC-3A-399 NC33645 – Crashed into an Andes peak during a revenue flight from Santiago to Lima via Arequipa due to improper instrument use; all four crew and fourteen passengers died.
- July 31, 1944 – Douglas DC-2-118A NC14268 "Santa Ana" – Crashed at Arajuna, Ecuador under unknown conditions; details on occupants unavailable.
- January 4, 1945 – Douglas DC-3A NC19470 – Illegal operation departing Limatambo Airport ended in a crash near Chorrillos, Peru killing four onboard.
- October 29, 1962 – Douglas DC-7B N51702 – During takeoff at La Paz El Alto Airport on a revenue flight from La Paz to Miami, this aircraft crashed but all six crew members and thirty-six passengers survived despite total loss of the plane.
United States
- Washington, DC
- New York City, New York
- Los Angeles, California
- Miami, Florida
- San Francisco, California
Panama Canal Zone
Argentina
- Paso Internacional Los Libertadores, Christ the Redeemer of the Andes, Cristo Redentor Pass, Chile
- Buenos Aires, Argentina
- San Salvador de Jujuy, Argentina
- Rufino, Argentina
- Junin, Argentina
- Salta, Argentina
- Villa Mercedes, San Luis, Argentina
- Cordoba, Argentina
- Mendoza, Argentina
- Mar del Plata, Argentina
Bolivia
- La Paz, Bolivia
- Puerto Suarez, Bolivia
- Robore, Bolivia
- San Ignacio de Velasco, Bolivia
- Concepcion, Bolivia
- Santa Cruz, Bolivia
- San Jose de Chiquitos, Bolivia
- Cochabamba, Bolivia
Brazil
Chile
Colombia
Ecuador
Peru
Uruguay
Sikorsky Aircraft Company
- Sikorsky S-38B
- Sikorsky S-43
Fairchild Aircraft Company
- Fairchild FC-2
- Fairchild 71
Ford Motor Company
- Ford Tri-Motor 5-AT
Lockheed Corporation
- Lockheed Vega Model 5
Douglas Aircraft Company
- Douglas DC-2
- Douglas DC-3
- Douglas DC-4
- Douglas DC-6 and DC-6B
- Douglas DC-7B
- Douglas DC-8-31 Intercontinental Jet (the sole jet model operated)
See also
Further reading
- William A. Krusen, Stephen Morrill, Harold R. Harris – Flying the Andes: The Story of Pan American Grace Airways and Commercial Aviation in South America, 1926-1967, University of Tampa Press, 1997.