 The acquisition of National Airlines for $437 million further burdened Pan Am's balance sheet, already under strain after financing the Boeing 747s ordered in the mid-1960s.This acquisition did little to improve Pan Am's competitive position in relation to nimbler, lower-cost competitors in a deregulated industry, as National's North-South route structure provided insufficient feed at Pan Am's transatlantic and transpacific gateways in New York and Los Angeles.The airlines had incompatible fleets (apart from the Boeing 727) and corporate cultures (partly as a result of National being perceived by some Pan Am employees as mainly a regional "backwoods" carrier with few trunk routes), and the integration was poorly handled by Pan Am management who presided over an increase in labor costs as a result of harmonizing National's pay scales with Pan Am's.