[What follows is excerpted from the Wikipedia article Pan American World Airways:]
While a program to refurbish Pan Am aircraft and improve the company's on-time performance began showing positive results (in fact, Pan Am's most profitable quarter ever was the third quarter of 1988), on December 21, 1988, the terrorist bombing of Pan Am flight 103 by Abdelbaset al-Megrahi above Lockerbie, Scotland, resulted in 270 fatalities. Pan Am's iconic image had made it a repeated target for terrorists, resulting in many travelers avoiding the airline as they had begun to associate it with danger. (...)
Pan Am was forced to declare bankruptcy on January 8, 1991. Delta Air Lines purchased the remaining profitable assets of Pan Am, including its remaining European routes and Frankfurt mini hub, the Shuttle operation, 45 jets, and the Pan Am Worldport at John F. Kennedy Airport, for $416 million. (...)
Pan Am ceased operations on December 4, 1991 following a decision by Delta's CEO, Ron Allen, and other senior executives not to go ahead with the final $25 million payment Pan Am was scheduled to receive the weekend after Thanksgiving. As a result, some 7,500 Pan Am employees lost their jobs, thousands of whom had worked in the New York City area and were preparing to move to the Miami area to work at Pan Am's new headquarters near Miami International Airport.