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Pan American Grace Airways (U.S.)

Panagra

Description of the flag

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United States of America

Description of the flag

I found some images which most likely feature the flag of Panagra (Pan American-Grace Airways). "Panagra was an airline formed as a joint venture between Pan American World Airways and Grace Shipping Company. "It was founded in 1929 to compete with SCADTA, a German-owned company (from its establishment in 1919 until 1940 when it was nationalizes and established as AVIANCA), and held a quasi-monopoly over air travel in parts of Colombia and South America during the 1940s and 1950s."
Source: http://en.wikipedia.org/wiki/Panagra
Esteban Rivera, 15 February 2014

Closeup image by Esteban Rivera, 15 February 2014		Original Picture image by Esteban Rivera, 15 February 2014

These pictures are extracted from a PDF book called "SCADTA por SCADTA" (SCADTA by SCADTA), by Carlos Valenzuela Acosta and Manuel Arango Echeverri, (March, 2013). It has not been published as a book (yet), but it is in CD format.

The closeup of the control tower in the Baranquilla air dock: from left to right is what seems to be the Panagra flag on the left, a white horizontal flag with a top stripe, white in the middle with the logo (www.digitaldeliftp.com/Images/pings/1945-PAA-logo-ad.png, without the "PAA", just the wing), and a bottom stripe), the SCADTA flag in the middle, and on the right is possibly the flag of Barranquilla.

I have come to the conclusion that the flag in this image is the Panagra flag, since it was established in the late 1920's and it was a direct competitor of SCADTA operating in Colombia as well.

Esteban Rivera, 15 February 2014

The flag on the left of the photo is probably that of Pan American World Airways whereas the flag on the right is possibly that of Grace Line
Miles Li, 20 February 2015

images located by Esteban Rivera, 13 November 2025

In June 1928, Pan American Airways Corporation, originally known as Aviation Corporation of the Americas (AVCO), was formed to obtain 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 (March 8) (also known as the Kelly Act) and Pan American believed 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.

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 December 31, 1928 Pan American President Juan Terry Trippe purchases 50 percent of Chilean Airways, which never operates as an air carrier. Both Peruvian Airways and Chilean Airways are eventually merged to form Pan American Grace Airways, Inc. as seen here: https://es.wikipedia.org/wiki/Panagra.

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, the parent company to Grace Shipping at that time, 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.

As early as 1953, the Civil Aeronautics Board had recommended that Pan Am divest itself of Panagra, because of Pan Am's decades-long control of air travel in the region and between US and Latin America. After years of failed negotiations between the two carriers, the mandate was finally fulfilled. Braniff President Charles Edmund Beard had negotiated an earlier agreement for Braniff to buy Panagra for $22 million USD in 1964.

A New York Federal Court ruled that Pan Am was in violation of the Sherman Anti Trust Act of 1890 by its actions in regards to limiting Panagra's Northern expansion. The New York Court found that Panagra was not in violation of the antitrust act but that Pan Am was in violation and should divest itself of Panagra stock and its ownership. In 1963, the case was sent to the Supreme Court who ruled that the case fell under the jurisdiction of the CAB.

Arrangements were made for Braniff to buy W. R. Grace's half of Panagra for $11 million USD with negotiations to continue into early 1965, for the purchase or Pan Am's half of Panagra. A projected merger date was to have been late summer 1965 but Pan American's legendary Founder and President Juan Terry Trippe did not accept Braniff's offer. With the overhaul of Braniff's management team in April 1965, the merger was further delayed until additional evaluation could be completed by the new management group.

Pan Am had been under pressure from the Civil Aeronautics Board, which requested that the Justice Department file charges against Pan Am, to remedy antitrust problems that the carrier had become involved in by limiting the northward expansion of Panagra. Panagra only operated as far north as Panama and extended south along the West Coast of South America to cities such as Cali, Colombia, Quito and Guayaquil, Ecuador, Lima, Peru, La Paz, Bolivia, Antofagasta and Santiago, Chile and Buenos Aires, Argentina. Pan Am operated scheduled passenger flights north from Panama to Miami.

In December 1965, Braniff International successfully negotiated the purchase of W. R. Grace and Company's 50-percent share in Panagra for $15 million USD. Three months later on March 17, 1966, Braniff further completed an agreement to purchase Pan American World Airways's 50-percent share in Panagra for the same amount. The plan was forwarded to the Civil Aeronautics Board who approved the merger agreement in July 1966.

Braniff Executive Vice President Charles Edward Acker presented a check for $15 million USD to W. R. Grace and Company Assistant General Council Walter Morris a month earlier in January 1967, which signaled the historic finalization of the merger between the two carriers. Earlier, Braniff had presented a check for $15 million USD to Pan American World Airways for their one-half share in Panagra. With the payments in place, the merger was allowed to commence.

On January 19, 1967, Braniff International completed the purchase agreement.

On February 1, 1967, Braniff International merged with Pan American Grace Airways, also known by the trade name Panagra. Braniff purchased the 39-year old South American West Coast airline for $30 million USD from its two owners, W. R. Grace and Company and Pan American World Airways, Inc.
Sources: https://www.braniffinternational.com/panagratimeline
https://www.braniffinternational.com/pan-american-grace-airways-inc https://en.wikipedia.org/wiki/Pan_American-Grace_Airways

Esteban Rivera, 13 November 2025

Panagra was also noted for other achievements in support of other non-aviation events. Just before the bombing of Pearl Harbor, when war with the Axis was imminent, Panagra, with the assistance of the respective South American governments and at the request of the US State Department, first paralleled and then replaced the services of German controlled SEDTA in Ecuador and Lufthansa in Peru and Bolivia (whose influence was exerted via local subsidiaries such as Lufthansa Perú and Lloyd Aéro Boliviano (LAB) in Bolivia respectively). This was designed to remove the Nazi threat in the region."
Source: https://jpbtransconsulting.com/2014/01/25/the-pan-am-series-part-xxiii-panagra/

James Patrick ("Jamie") Baldwin, 13 November 2025