A Cruise Company With Planes: What Happened To Carnival Air Lines?

When Carnival Cruise Lines bought an airline, it seemed like a decent idea. Carnival Air Lines would ferry passengers from the US out to the Bahamas, feeding the cruise ships with traffic. But the airline outgrew its humble roots, starting scheduled services and stealing passengers away from the traditional carriers. Here’s the story of Carnival Air Lines.

An airline for a cruise company

Founded by Ted Arison, the boss of giant cruise ship company Carnival Cruise Line, Carnival Air Lines started life as a feeder airline for the cruise firm. Ferrying high rollers from its home at Fort Lauderdale to Arison’s Crystal Palace Resort and Casino in Nassau, the Bahamas, it was a modest operation, with no planes of its own and the one route charter flight operated by Majestic Air, using a Boeing 727-100.

The origins of this airline go back even further than that, however. It started life as Pacific Interstate Airlines in 1984, scooting between Las Vegas and Los Angeles. The airline was charter, but in 1985 changed its name for Pacific Inter Air in the hopes of being granted a scheduled operator’s license.

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Under yet another new name, Bahamas Express, it began flying out of east coast hubs to the Bahamas. It wasn’t until 1988 that Carnival Cruise Line bought the airline. Originally conceived to be ‘Fun Air,’ thankfully, no aircraft were ever painted with that moniker. In 1989 it was renamed to Carnival Air Lines, and at last, it began to stand on its own two feet.

Rapid growth and the start of scheduled services

The airline began flying to more destinations, expanding out to the northeast US, as well as flying into the Caribbean. By 1995, it had a solid network up and down the East Coast, spanning 17 destinations as well as a further five, which were operated by its partner Paradise Islands Airlines.

Carnival Air Lines had grown to become much more than just a feeder for the cruise line. By 1996, it had 40 daily flights from Florida, New York, San Juan and Los Angeles. By then, only 5% of its revenue was from delivering passengers to cruise ships, while 75% was earned off of scheduled services. By now, it was flying a fleet of nine A300s, two 727s and 19 Boeing 737s.

Passengers loved Carnival Air Lines. Its attractively low fares and full-service passenger experience were in-keeping with its founder’s cruise line brand and saw it stealing customers from beleaguered Eastern Airlines and other incumbents. Its strategy of using cheaper secondary airports is something we’ve seen replicated many times over, and positioned it as a low-cost, high-value competitor in the industry.

Its success was partly down to a little bit of luck, in terms of timing. When it entered the scheduled services market, it did so just when Florida’s three biggest airlines, Braniff, Eastern and Pan Am, were starting to struggle financially. It boldly formed partnerships and codeshares with big foreign airlines, including Iberia and LanChile.

The end of the fun

The plucky upstart was not long for this world, despite all the good work it did in its time. Bankrupt Pan American Airways had reformed as Pan Am Corp and was hungry for growth. Amid unprecedented consolidation in the US at the time, September 1997 saw Pan Am Corp making an offer it couldn’t refuse.

To be fair, Carnival had started to lose money and was looking for a way out of the market. Pan Am too had racked up some losses. Between the two, losses combined to more than $150 million. That didn’t stop the new Pan Am from parting with $100 million for the airline.

For Carnival, it was the end of an era. The airline’s branding was dropped by Pan Am the very next year, although it continued to use the airline’s AOC. Sadly, the resumption of services was not enough for Pan Am II either, and the company declared bankruptcy on February 26^th.

The Pan Am name was sold at auction and bought by Boston-Maine Airways. That airline flew Carnival’s 727s for a few more years under the “Pan Am Clipper Connection” brand, before succumbing to the same fate as its namesake.

Did you ever fly Carnival Air Lines? We’d love to hear your memories of this unusual airline in the comments.