United Airlines
United Airlines (UAL) is an American airline, the second largest in the world. Based in Elk Grove, Illinois, near Chicago, it employs around 84,000 people and operates around 540 aircraft (Jan 2002). In 1994, 55% of company stock was given to employees as part of a pay cut, called ESOP (Employee Stock Ownership Plan). This made it the largest employee-owned company in the world. The shares have now been sold for pennies on the dollar, and the ESOP program has been terminated. In 2001 the company lost $2,137 million on revenues of $16,138 million and in 2002 the company was forced into bankruptcy protection. It is set to emerge in the first half of 2004.
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United Airlines Airbus A320-200. Larger version |
United has hub operations at:
O'Hare International Airport in Chicago, Illinois
Denver International Airport near Denver, Colorado
Dulles International Airport in Chantilly, Virginia and Dulles, Virginia
San Francisco International Airport in San Francisco, California
Los Angeles International Airport in Los Angeles, California
United also has significant operations at:
Miami International Airport in Miami, Florida
London Heathrow Airport in London, UK
New Tokyo International Airport in Narita, Japan
United has the United Express airline contracted to perform its regional flying. These are small airliners operating under contract from United to fly passengers from small cities to its hubs. Although the aircraft are painted in United colours, they are separate companies with different pilots and management.
UA is part of the Star Alliance and currently codeshares with SNCF French Rail to stations in France.
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History
UAL originated in the air mail service of Walter Varney, founded in 1926. In only four years the company included a number of airlines, aero manufacturing companies and several airports and was also closely associated with the new firm of William Boeing. Following the Air Mail Scandal of 1930, by 1934 the company still held its airlines routes but had lost all its non-airline holdings and had a new president in William A. Patterson (who remained in that office until 1963).
During WW II United was involved in the training of ground crews and material transportation. Post-war United benefited from the boom in demand, operating out of new operations hub in Denver. The company merged with Capital Airlines on June 1, 1961, making it the world's largest commercial airline.
In 1968 the company reorganized, creating UAL, Inc., with United as a wholly owned subsidiary. United also began to seek overseas routes in the 1960s, but the Transpacific Route Case (1969) denied them this expansion and it did not gain an overseas route until 1983. The economic turmoil from the 1970s and the pressures of the Airline Deregulation Act (1978) affected the company, with losses and a greatly increased turnover in top management. The company also diversified and changed its name twice before returning to its airline business in 1987. In 1990 the company initially expanded aggresively, but the aftermath of the Gulf War and increased competition led to losses of $332m in 1991 and $957m in 1992.
Another reorganization changed the company into majority employee-owned in 1994. In 1997 it joined the Star Alliance with Air Canada, Lufthansa, SAS and Thai Airways. It was among the first to introduce the Boeing 777 twin-jet on trans Atlantic routes.
Project Bojinka and September 11
If the Al-Qaida plot Project Bojinka wasn't discovered after an aprtment fire in Manila, Philippines, then the airline would have lost eight aircraft over the Pacific Ocean flying routes to and from East Asia and Southeast Asia on January 21, 1995. While the project was prevented, a "descendant" of the project perfected by Khalid Sheik Mohammed would cause tragedy on the company's airliners six years later.
As part of the September 11, 2001 Terrorist Attack, two United Airlines planes were hijacked, a Boeing 767 (United Airlines Flight 175) that crashed into one of the twin towers of the World Trade Center in New York City, and a Boeing 757 (United Airlines Flight 93) that is suspected to have been directed towards either the White House or Camp David by the hijackers. It is thought that the passengers succeeded in preventing this action and the aircraft crashed in a small Pennsylvania town.
Bankruptcy
In December of 2002, UAL Corporation filed for chapter 11 protection against bankruptcy. It has been commented that this development was triggered in part by the repercussions that the events of September 11th had on the North American airline industry as a whole and on United in particular. However the rise of low-cost competitors and problems with unions and within the management structure of the company were also significant. The immediate reason for the filing was the US government's refusal to grant United a $1.5 billion loan from the government airline aid program. The company was then forced to seek debtor-in-possession financing from commercial sources to cover the expected future loses.
On November 12, 2003, United Airlines launched a new low-cost carrier, Ted.
| Aircraft | Number | Type |
|---|---|---|
| Airbus A319 | 55 | Short haul / domestic |
| Airbus A320 | 98 | Short haul / domestic |
| Boeing 737 | 150 | Short haul / domestic |
| Boeing 747 | 31 | Long haul |
| Boeing 757 | 96 | Long haul |
| Boeing 767 | 48 | Long haul |
| Boeing 777 | 56 | Long haul |
