I recently came across this on YouTube and found it fascinating. It's an episode of Enterprise, a business documentary program shown on PBS in the early 1980s and hosted by the legendary Eric Severeid. This particular episode from 1983, entitled "Tailspin," documents the last days of Braniff International Airways, which, in spite of existing since 1930 and being the nation's eighth-largest carrier at the time, became the first major airline in the history of United States commercial aviation to declare bankruptcy in 1982.
Prior to 1979, the US commercial airline industry was heavily regulated; the government determined which carriers could fly which routes and how much they could charge. Once deregulation occurred, many airlines, including Dallas-based Braniff, saw an opportunity to grow their business in ways previously unimaginable. The airline's leadership liberally added new routes and borrowed heavily to finance its expansion.
The results were disastrous, especially once the US economy entered recession. In late 1981, the over-leveraged, debt-laden, money-hemorrhaging airline hired Howard Putnam away from Southwest Airlines to try to rescue the company.
Putnam attempted to cut costs, soothe creditors and streamline operations, but Braniff's many internal problems, as well as fierce competition from larger, deeper-pocketed rivals such as American Airlines, made his job difficult. Attempts to attract more passengers, such as gimmicky fare promotions, cost Braniff the goodwill of travel agents (who issued most airline tickets back in those days and relied on commissions, as a percentage of fares, for revenue). An attempt to maintain liquidity by selling Braniff's Latin American network to Pan Am was briefly held up by the Civil Aeronautics Board (the network would eventually be acquired by Eastern), and proved to be too little, too late for the airline to survive. Braniff ceased operations at midnight on May 13, 1982.
The results were disastrous, especially once the US economy entered recession. In late 1981, the over-leveraged, debt-laden, money-hemorrhaging airline hired Howard Putnam away from Southwest Airlines to try to rescue the company.
Putnam attempted to cut costs, soothe creditors and streamline operations, but Braniff's many internal problems, as well as fierce competition from larger, deeper-pocketed rivals such as American Airlines, made his job difficult. Attempts to attract more passengers, such as gimmicky fare promotions, cost Braniff the goodwill of travel agents (who issued most airline tickets back in those days and relied on commissions, as a percentage of fares, for revenue). An attempt to maintain liquidity by selling Braniff's Latin American network to Pan Am was briefly held up by the Civil Aeronautics Board (the network would eventually be acquired by Eastern), and proved to be too little, too late for the airline to survive. Braniff ceased operations at midnight on May 13, 1982.
Seriously: if you have half an hour to spare, watch the whole thing. Film crews were given access to Putnam and Braniff's upper management as it struggled to stay afloat during its final days, which makes it especially fascinating.
As the documentary explains, Braniff was trying to survive in an environment when the US commercial aviation industry as a whole had too many seats and too few passengers. By the time he arrived, there was probably nothing Putnam could have done to save the company.
Braniff's demise would be the first of many airline bankruptcies, mergers and acquisitions, as deregulation completely transformed the US commercial aviation industry. Today, two-thirds of all domestic passengers are carried by just four airlines: America, Delta, Southwest and United.
Cool fact: Braniff, was along with Eastern, one of the two original airlines serving Houston's first purpose-built air terminal.
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