United Airlines

United Airlines
IATA
UA
ICAO
UAL
Callsign
UNITED
Founded 1926 (as Boeing Air Transport)
1934 (as United Air Lines)
AOC # UALA011A[1]
Hubs
Focus cities Narita International Airport (Tokyo)
Member lounge Red Carpet Club
Alliance Star Alliance
Fleet size 360 (+50 orders, 100 options)
Destinations 216
Company slogan It's Time To Fly
Parent company UAL Corporation
Headquarters Chicago, Illinois, United States
Key people
  • Glenn F. Tilton (Chairman, CEO)
  • John P. Tague (President)
    Kathryn Mikells (CFO)
  • Alexandria Marren (SVP)
Revenue increase US$16.3 Billion (FY 2009)
Operating income decrease US$–651 Million (FY 2009)
Net income decrease US$–651 Million (FY 2009)
Total assets increase US$18.6 Billion (FY 2009)
Total equity decrease US$–2.46 Billion (FY 2008)
Website www.united.com

United Air Lines, Inc., doing business as United Airlines (NASDAQUAUA), is a major airline based in the United States and one of the world's largest airlines with 48,000 employees [2] and 360 aircraft.[3] It is a subsidiary of UAL Corporation with corporate offices in Chicago. United's largest hub is Chicago's O'Hare International Airport. United also has hubs in Washington Dulles International Airport, Denver International Airport, San Francisco International Airport, and Los Angeles International Airport. United also maintains focus city operations at Narita International Airport near Tokyo. United is a founding member of the Star Alliance, the largest airline alliance in the world, and offers connections to over 1,000 destinations in over 170 countries worldwide. [4] United's parent company UAL Corporation announced that it will move its operational base from suburban Elk Grove Township, Illinois, to the Willis Tower (formerly Sears Tower) in the Chicago Loop in 2010.[2]

On Sunday, May 2, 2010, the Boards of Directors at Continental Airlines and United Airlines approved a stock-swap deal that would combine them into the world's largest airline in revenue passenger miles and second largest in fleet size and destinations after Delta Air Lines. The new airline will take on the United Airlines name, Continental's logo and be based in United's hometown of Chicago. The parent company of the new carrier will be called United Continental Holdings, Inc. The new United will be run by Continental's CEO, Jeffery Smisek, along with United Airline's CEO, Glenn Tilton, serving as non-executive Chairman of the board. The deal will still need final approval from antitrust regulators and shareholders before being allowed to go forward. United's pilots union announced that they "are fully prepared to protect and defend the interests of all United pilots."[5]

On August 27, 2010, the U.S. Department of Justice approved the $3 billion merger, which is expected to be complete after shareholders of both companies vote on the proposal on September 17, 2010.[6]

Contents

History

Beginnings

United Airlines traces its claim to be the oldest commercial airline in the United States to the Varney Airlines air mail service of Walter Varney, who also founded Continental Airlines. It was founded in Boise, Idaho. Varney's chief pilot, Leon D. "Lee" Cuddeback, flew the first Contract Air Mail flight in a Swallow biplane from Varney's headquarters in Boise, Idaho, to the railroad mail hub at Pasco, Washington, on April 6, 1926, and returned the following day with 200 pounds of mail.[7] April 6 is regarded in the United Airlines company history as both its own birthday[8] and the date on which "true" airline service—operating on fixed routes and fixed schedules—began in the United States. Varney Airlines' original 1925 hangar served as a portion of the terminal building for the Boise Airport until 2003, when the structure was replaced.

In 1927, airplane pioneer William Boeing founded his own airline, Boeing Air Transport, and began buying other airmail carriers, including Varney's. Within four years, Boeing's holdings grew to include airlines, airplane and parts manufacturing companies, and several airports. In 1929, the company changed its name to United Aircraft and Transport Corp. (UATC). In 1930, as the capacity of airplanes proved sufficient to carry not only mail but also passengers, Boeing Air Transport hired a registered nurse, Ellen Church, to assist passengers. United claims Church as the first airline stewardess.[9] On May 7, 1930, UATC completed the acquisition of National Air Transport Inc, a large carrier based in Chicago.[10] On March 28, 1931, UATC formed the corporation United Air Lines, Inc. to manage the UATC airline subsidiaries.[11]

Following the Air Mail scandal of 1930, the Air Mail Act of 1934 banned the common ownership of manufacturers and airlines. UATC's President Philip G. Johnson was forced to resign and moved to Trans-Canada Airlines, the future Air Canada. William Boeing's company was broken into three: a parts supplier (the future United Technologies), an aircraft manufacturer (the Boeing Airplane Company), and the United Air Lines airline group. The airline company's new president, hired to make a fresh start as airmail contracts were re-awarded in 1934, was William A. Patterson, who remained as president of United Airlines until 1963.[12]

Expansion into a national carrier

An early United 727 hanging overhead at the Museum of Science and Industry in Chicago

United's early route system, formed by connecting U.S. air mail routes, operated east-to-west along a transcontinental route from New York City via Chicago and Salt Lake City to San Francisco, as well as north-and-south along the West Coast. The early interconnections during this era became the basis of major United hubs in Chicago and San Francisco, followed later by additional hubs in Denver and Washington, D.C. These four cities remain United's principal hubs to this day.

On the night of October 11, 1933, a United Boeing 247 exploded in mid-air and crashed near Chesterton, Indiana, killing all seven people aboard. Investigation revealed that the explosion was caused by a nitroglycerin bomb placed in the baggage hold. The United Airlines Chesterton Crash is believed to be the first proven case of air sabotage in commercial aviation history. No suspects or motives were ever discovered.

United Air Lines route map, 1940
A United DC-6, parked on the northwest maintenance ramp of Stapleton Airport, September 1966

During World War II, United-trained ground crews modified airplanes for use as bombers, and transported mail, material, and passengers in support of the war effort. Post-war United benefited from both the wartime development of new airplane technologies (like the pressurized cabin which permitted planes to fly above the weather) and a boom in customer demand for air travel. This was also the period in which Pan American Airways established a Tokyo hub and revived its Pacific route system that would later be acquired by United.

On November 1, 1955, United Airlines Flight 629, which was flying from Stapleton Airport in Denver to Portland, Oregon, was bombed, killing everyone on board the Douglas DC-6B aircraft. The bomb was planted by Jack Graham who placed the device in his mother's luggage with the intent of collecting on her life insurance policy. Graham was arrested, tried, and was executed a year after the explosion.[13]

United merged with Capital Airlines on June 1, 1961, making it the world's largest commercial airline and giving it a route network covering the entire United States.

In 1968 the company reorganized, creating UAL Corporation, with United Airlines as a wholly owned subsidiary.

United Airlines has the distinction of being the only commercial airline to have operated Executive One, the designation given to a civilian flight which the U.S. President is aboard. On December 23, 1973, then President Richard Nixon flew as a passenger aboard a United DC-10 flight from Washington Dulles to Los Angeles. White House staff explained that this was done to conserve fuel by not having to fly the usual Boeing 707 Air Force aircraft.[14] In keeping with the common practice of having two aircraft immediately available at all times during Presidential travel, an Air Force aircraft flew behind in case of an emergency.

De-regulation

United had begun to seek overseas routes in the 1960s, but the Transpacific Route Case (1969) denied them this expansion. It did not gain an overseas route until 1983, when they began flights to Tokyo from Portland and Seattle. In 1985, United agreed to purchase Pan American World Airways' entire Pacific Division, Boeing 747SPs, and L-1011-500s, and flight crew staffs for $750 million. By the end of 1986, United operated flights to 13 Pacific destinations, most of which were purchased from the ailing Pan American World Airways.

Economic turmoil, labor unrest, and the pressures of the 1978 Airline Deregulation Act greatly affected the company, which incurred losses and saw a greatly increased turnover in its senior management through the 1970s and early 1980s.

In May 1981, one week after rival American Airlines launched AAdvantage, the first modern frequent flyer program, United launched its Mileage Plus.

In 1982, United became the launch carrier for the Boeing 767, taking its first delivery of 767-200s on August 19.

In 1984, United became the first airline to serve all 50 states when it introduced service to Atlanta, Nashville, Memphis, Little Rock, Fargo, Casper, Jackson, and Charleston.

Strike of 1985

On May 17, 1985, United's pilots went on a 29-day strike claiming the CEO, Richard Ferris, was trying to "break the unions." They used management's proposed "B-scale" pilot pay rates as proof.[15] American Airlines already had a non-merging B-scale for its pilots.[16] Ferris insisted United had to have pilot costs no higher than American's, so he offered United pilots a "word-for-word" contract to match American's, or the same bottom line numbers. The United ALPA-MEC rejected that offer. The only choice left, to achieve parity with American's pilot costs, was to begin a B-scale for United's new-hire pilots.[17]

A United Boeing 747-100 in the "Rainbow Scheme", designed by Saul Bass. Used from 1974 to 1993.

Ferris wanted that B-scale to merge in the captain's ranks, which was more generous than American's B-scale, that never merged at all. But, the ALPA MEC insisted they merge in the new pilot's sixth-year with the airline. In the final hours before the strike, nearly all issues had been resolved, except for the time length of the B-scale.[18] It appeared that would be resolved too as negotiations continued. ALPA negotiators delivered a new counter-proposal at 12:20 a.m. in an effort to avoid the strike. However, MEC Chairman Roger Hall, who was hosting a national teleconference from the Odeum (a convention center in the Chicago suburbs) with F. Lee Bailey, declared the strike was on at 12:01 a.m., on May 17, without further consulting the negotiators, some of whom believed they could find agreement on all contract terms, if the negotiations were allowed to continue. Moments before the ALPA announced strike deadline, they began a "countdown of the final 30 seconds from Chicago" (the Odeum teleconference). Doing that made it impossible to extend the strike deadline, so that the final issues could be resolved without a strike.[19][20]

Mr. Ferris changed United's parent company's name from UAL Corporation to Allegis in February 1987 but the name change was short lived.[21][22] Following Ferris' termination by the board, Allegis divested its non-airline properties in 1987 and reverted to the name UAL Corp. in May 1988.[21]

Record-setting flight

In 1988, using a 747SP-21 purchased from Pan American World Airways, United flew a two-stop around-the-world flight to raise money for the Friendship Foundation, to which the plane was 'loaned'. The flight made a very short-lived record for fastest flight around the globe; within a month, a Gulfstream IV business jet had broken Friendship One's record.[23]

Employee Stock Ownership Plan

The decline of Pan American World Airways continued to offer new opportunities for United. In 1991 the company expanded dramatically, purchasing Pan Am's routes to London Heathrow Airport. In direct negotiations with the UK government, United also obtained rights to fly to Heathrow from Chicago. However, the aftermath of the Gulf War and increased competition from low-cost carriers led to losses of USD $332M in 1991 and USD $957M in 1992.[24] In 1992, United purchased now-defunct Pan Am's Latin American and Caribbean routes and Miami gates, but United allowed months to elapse between Pan Am's demise and its launch of service.

In 1994, United's pilots, machinists, bag handlers and non-contract employees agreed to acquire 55% of company stock in exchange for 15% to 25% salary concessions. The flight attendants voted to not participate in the deal, and at the beginning some wore buttons saying "we just work here." The Employee Stock Ownership Plan (ESOP) made United the largest employee-owned corporation in the world. United used the opportunity to create a low-cost subsidiary, Shuttle by United, in an attempt to compete with low-cost carriers.

United Airlines Boeing 777-200 taking off at Amsterdam Airport Schiphol in the 1993–2004 livery which is being phased out in favor of a new white and blue scheme

United made substantial use of its employee-ownership in its marketing communications, with slogans such as "the employee-owners of United invite you to come fly the friendly skies," "we don't just work here," and "thank you for calling United Airlines; please hold and one of our owner-representatives will be with you shortly."

The financial outcomes of the ESOP were decidedly uneven for different players. As part of ESOP agreement, United CEO Wolf resigned and took a consulting job with Lazard Freres, the very investment company he had hired to advise United's board during the ESOP buyout process. Stewart Oran, the key legal advisor to the pilots' union, received a $5.5 million package to join the management of the new employee-owned company as legal counsel after the ESOP was formed.[25] United's unions, having larger voice in running the company, later successfully bargained for significant pay increases, but the effect was only short-term. The rank and file employees were locked into their stock, which got wiped out in the eventual bankruptcy. It was around this period (in 1993) that United introduced its grey and blue color scheme. It had been criticized that the color scheme blended with the darkness during nighttime operations.[26]

Turn-of-the-century developments

In 1997, United co-founded the Star Alliance with Air Canada, Lufthansa, SAS and Thai Airways. That same year, United opened a major hub at Los Angeles International Airport.

United's three livery styles seen at San Francisco International Airport, one of its main hubs. United is also one of the founding members of Star Alliance.

United was the launch customer of the Boeing 777 and had significant input on its design. It was also the first airline to introduce the twin-jet in commercial service.

In 1998, Delta Air Lines and United introduced a marketing partnership that included a reciprocal redemption agreement between SkyMiles and Mileage Plus programs and shared lounges.[27] This scheme allowed members of either frequent flier program to earn miles on both carriers and utilize both carriers' lounges.[27] Delta and United attempted to form an even cozier codeshare relationship, but this was deal was effectively killed by ALPA.[28] The marketing partnership ended in divorce in 2003, but paved the way for a future alliance with US Airways.

In May 2000, United announced plans to acquire competitor US Airways in a complex deal valued at $11.6 billion. The offer drew immediate scorn from consumer groups and employees of both airlines. By the following year, regulatory sentiment was against the deal, and United withdrew the offer just before the Department of Justice barred the merger on antitrust grounds in July. The two airlines subsequently formed an amicable partnership that led to US Airways' entrance into the Star Alliance.

United Airlines Boeing 777-200 landing

May 2000 also saw a bitter contract dispute between United and its pilots' union, again. The pilots wanted their pay restored to the levels that existed prior to deregulation. Planning for the busy summer season, United had counted on its pilots flying overtime. However, the pilots could not be forced to work overtime, and most pilots refused to fly the extra hours. Although United knew they would have to cancel numerous flights if this were to happen, they did not hire new pilots to make up for the potential shortage. Over the summer, United had to cancel a large portion of its schedule at its major hubs. Eventually, CEO Jim Goodwin and the rest of the management had to get the pilots back in the cockpits and quickly offered the pilots a 48% increase over four years with up to 28% upfront.

September 11, 2001

As part of the September 11, 2001 terrorist attacks, two United Airlines planes were hijacked by terrorists affiliated with al-Qaeda. One aircraft was a Boeing 767-222 (Flight 175) that crashed into the South Tower of the World Trade Center in New York City and the other was a Boeing 757-222 (Flight 93) that crashed in rural Pennsylvania. Flight 93 was suspected to have been directed towards the United States Capitol building according to the United States Department of Homeland Security.

Bankruptcy and reorganization

With a strong presence on the West coast, United benefited from the dot-com boom which boosted traffic (especially premium traffic) to the San Francisco hub. This increase was only temporary and when the bubble finally burst, United was in a worse position than before because it had failed to keep costs under control, possibly due to giving its pilots pay raises of up to 28% in the summer of 2000.[29] Coupled with a battered network, the September 11 attacks and skyrocketing oil prices, the company lost $2.14 billion in 2001 on revenues of $16.14 billion. In the same year United applied for a $1.5 billion loan guarantee from the federal Air Transportation Stabilization Board established in the wake of the September 11 attacks. When the IAM failed to approve the loan guarantee—while all other unions approved it—the application was rejected in late 2002 and the company was forced to seek debtor-in-possession financing from commercial sources to cover the expected future losses. United made several attempts to obtain the government loans, even enlisting several congressmen and senators for help. The government rejected the application claiming United "could probably obtain the $2 billion in financing it needs to emerge from protection without a federal loan guarantee".[30]

Unable to secure additional capital, UAL Corporation filed for chapter 11 bankruptcy protection in December 2002. The ESOP was terminated, although by then its shares had become virtually worthless. Blame for the bankruptcy has fallen on the events of September 11, which triggered financial crisis in all the major North American airlines, coupled with the economic slowdown that was underway.[31]

United continued operations during its bankruptcy, but was forced to cut its costs drastically. Tens of thousands of workers were furloughed, and all city ticket offices in the US closed. The airline canceled several existing and planned routes, and eliminated its entire Latin American gateway and flight crew base at Miami International Airport after March 1, 2004. In 2003, in spite of the fact that all three of its maintenance bases were protected in the mechanic labor agreement, United abandoned its maintenance hubs in Oakland and Indianapolis, even though maintenance was less expensive in Indianapolis, and transferred work to its San Francisco Maintenance Operations Center. Furthermore, the company reasoning for abandoning the two maintenance bases was based on costs that existed before the company reduced mechanic pay during bankruptcy, thus questioning the original reasoning for abandoning the two bases. Furthermore, they reduced their mainline fleet from 557 (before 9/11) to 460 aircraft.

At the same time, the airline continued to invest in new projects. On November 12, 2003, it launched a new low-cost carrier, Ted, to compete with other low-cost airlines. In 2004 it launched its luxury "p.s." (for "premium service") service on re-configured 757s from JFK Airport in New York City to Los Angeles and San Francisco. The service was targeted to business customers and high-end leisure customers in the coast-to-coast market.

Financial pressure on the airline was heavy. The SARS epidemic in 2003 depressed traffic on United's extensive Pacific network. The soaring cost of jet fuel ate away remaining profits United made. United implemented several fare hikes on overseas routes, citing rising fuel costs, in 2004 and 2005. Two days after its triumphant first flight to Vietnam, United announced that it would cut U.S. flight capacity by 14% after the holidays and add more international flights, which were more profitable.

United took advantage of its Chapter 11 status to negotiate hard-to-cut costs with employees, suppliers, and contractors, including cancellation of feeder contracts with United Express Atlantic Coast Airlines (which became Independence Air) and Air Wisconsin (which became a US Airways Express carrier).

Most controversial of all, however, was the 2005 cancellation of its pension plan, the largest such default in U.S. corporate history. It renegotiated its contracts with the pilots' and mechanics' unions and the Association of Flight Attendants for lower pay. Criticism was also leveled at the CEO, Glenn Tilton, for demanding pay cuts from employees while receiving the highest salary of any major U.S. airline CEO.[32]

Originally slated to exit bankruptcy protection after 2½ years in the third quarter of 2005, United requested yet another extension in light of record-high fuel prices. On August 26, 2005, the bankruptcy court extended the airline's exclusive right to file a reorganization plan to November 1, although it also stated firmly this extension would be the last. United announced at the same time it had raised $3 billion in exit financing and filed its Plan of Reorganization, as announced, on September 7, 2005.

The bankruptcy court approved the restructuring plan on January 20, 2006, clearing the way for United to exit bankruptcy on February 1, 2006, and finally return to normal operations.

Beyond Chapter 11

On December 9, 2004, the airline made history when UA869 (747-400) landed at Ho Chi Minh City (formerly Saigon), Vietnam. The scheduled flight from San Francisco via Hong Kong (SFOHKGSGN) was the first by a U.S. airline since the end of the Vietnam War, when Pan Am halted service shortly before the fall of Saigon in 1975[33]

United's management have called for consolidation in the industry. The Wall Street Journal revealed on December 12, 2006, that Continental Airlines was in merger discussions with United. A deal was not "certain or imminent," with the talks being in a preliminary state.[34][35] On April 4, 2007, United and British carrier BMI announced that they would 'effectively merge their trans-Atlantic operations', which would involve strengthening their alliance to a level far more intimate than its current code-share alliance.[36][37] The merged operations would begin in March 2008, if approved. On May 3, 2007, United acquired an equity stake in its longtime partner Aloha Airlines.[38] On June 14, 2007, CFO Jake Brace said his company is still looking to tie the knot with a suitable merger partner.[39] As of September 2007, United's largest owner was Bank of America, and Fidelity Investments became the second largest owner by acquiring an 11 percent stake in the company.[40]

On September 25, 2007, United received permission from the FAA for non-stop service from SFO to Guangzhou, China, starting in April 2008. Its application to fly between Los Angeles and Shanghai in 2009 was denied. Due to the impact of higher fuel costs it was announced on April 14, 2008, that this route would be delayed for at least one year.

United has been investigating significant potential changes to its corporate structure. The initiatives under consideration include:[41]

On November 14, 2007, Pardus Capital Management LP, a hedge fund that owns 7 million shares of Delta and 5.6 million shares of United, called for the two carriers to merge. This action sent shares of both airlines up. However, the two airlines quickly denied official talks of any merger.[42][43][44]

On February 19, 2008, Westin Hotels & Resorts announced a refreshed partnership with United where Westin will provide products from their Heavenly Bed line on p.s. routes.

In May 2008, the American Customer Satisfaction Index scored United Airlines second-last among US-based airlines in customer satisfaction with a 21% decrease since the study began in 1994 and a 11% decrease over the previous year.[45]

On June 12, 2008, United announced it would charge $15 for the first checked bag, becoming the second United States airline to do so, the first being American Airlines.[46] The charges, while not affecting every United flight, were created in an effort to offset high fuel prices.

On June 28, 2008, United announced the cessation of several international routes including San FranciscoNagoya and Chicago – Mexico City.[47][48][49]

On September 8, 2008, the price of UAL shares fell by nearly 99% in fifteen minutes to $0.01 US amid rumors of another bankruptcy, before NASDAQ temporarily halted trading. The rumors were traced to an old story on the South Florida Sun-Sentinel website about the 2002 bankruptcy being picked up by Google News and subsequently presented by Bloomberg LP as breaking story. The share price subsequently recovered most of its value.[50] On February 1, 2006, United emerged from Chapter 11 bankruptcy protection under which it had operated since December 9, 2002, the largest and longest airline bankruptcy case in the history of the industry.[51]

On April 27, 2008, it was reported that UAL Corporation and US Airways Group, Inc. were in the advanced stages of merger negotiations as well. Sources stated that a merger was expected to be announced within two weeks of the report.[52] United pilots vociferously rejected the proposal and vowed to fight it.[53] Star Alliance co-founder Lufthansa Airlines CEO Wolfgang Mayrhuber threw his support behind a marriage of partner carriers United and US Airways.[54]

On June 4, 2008, United announced it would close its Ted unit.[55] and reconfigure them for a return to mainline configuration to compensate the removal of United's Boeing 737s that were to be retired. That retirement plan included Boeing 737s and Boeing 747s, reducing the mainline fleet from 460 to 360 aircraft and furthering the airline's goal of cutting domestic capacity by 15 percent. On January 6, 2009, Ted ended operations converting its entire fleet into United mainline fleet. All Ted flights were changed into United mainline flights.

In January 2009, United announced a code-sharing agreement with Aer Lingus for flights between Washington Dulles International Airport and Madrid, Spain. Aer Lingus will operate the service, which is permitted under recent open skies agreements between the US and EU.[56]

In 2009, United Airlines entered into an extensive partnership with Continental Airlines. This partnership includes codeshare and frequent flyer agreements. As a part of the agreement, Continental left the Delta-led SkyTeam alliance to join United's Star Alliance. Elite members of each airline's frequent flyer program receive benefits on both airlines.

As of May 2009, the U.S. Department of Transportation rated UAL eleventh among 19 US carriers in lost, damaged, delayed or pilfered baggage with 3.67 complaints per 1,000 passengers.[57] In July 2009, a viral music video, "United Breaks Guitars"[58] was released about a disputed damaged baggage claim with the airline. United said it would like to use the video as a staff training tool to help the company improve its internal "corporate culture" relating to its customer relations in that area of its services.[59]

On October 28, 2009, United flew its final Boeing 737 flight, as United Flight 737. The retirement flight flew from Washington-Dulles to San Francisco via Chicago-O'Hare, Denver, and Los Angeles, United's main hubs. United's 737 retirement was particularly significant, as it was the U.S. launch customer of the 737 family in 1967, and operated variants of the type for 42 years. If the merger with Continental is approved, the airline would once again have 737s in its fleet.

Merger with Continental

In February 2008, UAL Corporation and Continental Airlines began advanced stages of merger negotiations and were expected to announce their decision in the immediate aftermath of a definitive merger agreement between rival Delta Air Lines and Northwest Airlines.[60] The timing of the events was notable because Northwest's golden shares in Continental (that gave Northwest veto authority against any merger involving Continental) could be redeemed, freeing Continental to pursue a marriage with United. On April 27, 2008, Continental broke off merger negotiations with United and stated it was going to stand alone.[61] Despite ending merger talks, Continental announced that it will join United in the Star Alliance.[62]

United and US Airways were in advanced merger talks in late April 2008, following the announcement that Continental had broken off talks with United.[63] In June 2008, CEOs of both United Airlines and Continental Airlines signed an alliance pact presaging their eventual merger. The alliance is an agreement to link international networks and share technology and passenger perks. This agreement is basically a "virtual merger" that includes many of the benefits of a merger without the actual costs and restructuring involved. The alliance took effect about a year after Delta Air Lines and Northwest Airlines completed their merger, as that released Continental from the SkyTeam contract and allowed for the required nine-month notice. Additionally, Continental joined the Star Alliance, as Delta and Northwest merged.[64]

United Airlines was reported to be in serious merger discussion with US Airways in early April 2010. A New York Times report indicated that a deal was close. Union consent was cited as a major hurdle for negotiators to clear.[65] On April 22, 2010, United announced that it would not pursue a merger with US Airways.[66]

The Board of Directors at Continental and United airlines approved a stock-swap deal that would combine them into the world's largest airline on Sunday, May 2, 2010. The airlines publicly announced the deal the next day.[67] The new airline will take on the United Airlines name and be based in United's hometown of Chicago. It will be run by Continental's CEO, Jeff Smisek. UAL's CEO, Glenn Tilton, will be non-executive chairman. The deal will still need final approval from labor unions, shareholders, and antitrust regulators before being allowed to go forward.[5] This would re-unite Walter Varney's airlines, which offspring includes Continental and United. [68] On 27 August 2010, US regulators approved the planned merger, leaving only a shareholder vote before the merger is completed, which is planned to take place on 1 October.[69]

Both airlines have taken losses in the recession and expect the merger to generate savings of more than $1 billion a year.[70] Combined, they fly to some 370 destinations and carry 144 million passengers a year.[70] Combined revenues will be about $29 billion.[71]

Currently, no United or Continental planes have been painted in the new United livery. Reaction to the new United livery has been mostly negative, and has even caused public outcry from employees and frequent flyers on social networking sites such as Facebook and Twitter to save the company's current Saul Bass logo and livery.

The company's CEO's have not released any specific dates on which the first plane will be painted in the new livery, however the company's CEO has stated repainting all aircraft quickly into the new livery, in order to have a "uniform livery" will be a priority once the merger is approved. As of late July 2010, United Airlines has suspended all future repaints into the current livery. N794UA, a Boeing 777-200 was the last aircraft to receive United's current livery.

After the merger is complete, United's fleet will comprise Airbus A319s, Airbus A320s, Boeing 737s, Boeing 747s, Boeing 757s, Boeing 767s, and Boeing 777s with orders of Boeing 787s and Airbus A350s. Most of the post-merger fleet aircraft powerplants will be produced by General Electric and Pratt and Whitney.

Post Merger Fleet:

United Airlines fleet
Aircraft United Fleet Continental Fleet Total
In use Orders In use Orders In use Orders
Airbus A319-100 55 55
Airbus A320-200 97 97
Airbus A350-900XWB 25 25
Boeing 737-500 31 31
Boeing 737NG 195 41 195 41
Boeing 737-700 36 36
Boeing 737-800 117 117
Boeing 737-900 12 12
Boeing 737-900ER 30 30
Boeing 747-400 25 25
Boeing 757-200 96 41 137
Boeing 757-300 21 21
Boeing 767-200ER 10 10
Boeing 767-300ER 35 35
Boeing 767-400ER 16 16
Boeing 777-200 19 19
Boeing 777-200ER 33 22 2 55 2
Boeing 787-8 25 11 36
Boeing 787-9 14 14
Total Number of Aircraft 360 50 336 68 696 118

2009 recession, fuel efficiency issues and new jet orders

A United Airlines Boeing 767-300ER taking off from London Heathrow Airport, England. (2007)

In June 2009, United asked manufacturers Boeing and Airbus to submit proposals to sell the airline up to 150 jets in a winner-take-all competition. United is taking advantage of declining sales at both plane makers to reap steep price reductions; the large size of this prospective order will also influence pricing.[72] The Wall Street Journal cited the average ages of four types of jets in United's fleet as follows:

On November 19, 2009, the Chicago Tribune reported that United was very close to making a decision on a widebody order by the end of 2009. Another competition for narrowbody orders will commence separately in early 2010.[73]

Company affairs and identity

Headquarters

UAL Corporation World Headquarters, 77 West Wacker Drive in the Chicago Loop

United Airlines has its corporate headquarters in 77 West Wacker in Chicago Loop, Chicago, United States.

In 2006 United Airlines announced that it would be moving its headquarters and its 350 top executives from 1200 East Algonquin Road in suburban Elk Grove Township to 77 West Wacker Drive.[74][75] Before making its choice, United was considering moving its headquarters to Denver, Colorado, or San Francisco, California.[76] In the Chicago Loop United had considered 115 South LaSalle Street, 190 South LaSalle, and 200 West Madison Street.[74] Douglas F. Beaver of the Los Angeles Times described the United Airlines operational center in Elk Grove Township as "sprawling for acres over the northwest Chicago suburbs."[77]

The Top 350 Executives were moved in the first half of 2007 to 77 West Wacker. The Elk Grove Village campus was renamed an Operations Center, and United Airlines consolidated several of its offices in the suburbs of Chicago into the Elk Grove Village campus.[78]

Fuel burn reduction strategy

Despite a pursuit to cut fuel burn and reduce carbon output, United was one of the last US based carriers to pursue blended winglet additions to their 757 aircraft certified for the fuel saving installation and has been slow to implement similar improvements on 767 aircraft. On December 9, 2009, United officially announced orders for 25 Boeing 787-8 aircraft and 25 Airbus A350-900 XWB aircraft[79] The orders are worth $4 billion and $6 billion, respectively, at list prices. United's purpose is to reduce fuel burn on typical flights by up to one-third, saving 175 million gallons of fuel per year, and to simplify maintenance by reducing the number of classes of aircraft used on United's network. The 787 will replace the 767; the larger variant of the A350 will replace the 747. Ultimately, United intends to fly only three types of widebody aircraft: The 777, 787, and the A350. Narrow body replacement bids for the 737 fleet are expected to begin in 2010, with Embraer of Brazil and Bombardier of Canada participating along with Boeing and Airbus.[80]

Brand

A United Boeing 747SP was converted into the Stratospheric Observatory for Infrared Astronomy in 1997

United adopted a red, white and blue shield logo in 1936, but its use varied widely and was eventually abandoned altogether in the early 1970s. In 1974, the airline commissioned designer Saul Bass to develop a new logo. The "tulip" logo of colored stripes representing overlapping letter "U"s remains in use today with only slight modification. United's grey livery featured the words "Worldwide Service" near the front of the aircraft.

The early slogan "The Main Line Airway," emphasizing its signature New York-Chicago-San Francisco route, was replaced in 1965 with "Fly the Friendly Skies." The "friendly skies" tagline was used until 1996. The current slogan and ad campaign since 2004, is "It's time to fly." Other United Slogans include:

United's theme song is George Gershwin's 1924 "Rhapsody in Blue", which it licensed from Gershwin's estate for $500,000 in 1976.[82] "Rhapsody" would have entered the public domain in 2000, but the Sonny Bono Copyright Term Extension Act of 1998 extended its copyright another 20 years.

United is a sponsor of five of six of Chicago's major professional sports teams—the Bears, Blackhawks, Bulls, Cubs and White Sox – only the Fire are unaffiliated. The Blackhawks and Bulls play their games in the United Center, which the airline holds the naming rights to until 2014. The Cubs use a United 757 as their charter jet for transport between games, and the White Sox, similarly, use an Airbus 320 as their charter operating under flight number UAL9904.

Destinations

United Airlines flies to 73 domestic destinations and 41 international destinations in 25 countries across Asia, Americas, Europe, Oceania, and Africa not including cities only served by United Express.

Route network

United's logo as seen at United hub Denver International Airport

United operates an extensive domestic route network concentrated in the Midwest and western United States. United is also prominent in transcontinental, transatlantic, and transpacific service. It is the leading US carrier to Hawaii and largest to Asia and Australia, flying 26.15 billion transpacific revenue passenger miles in 2006 on 306 weekly departures. United also is the leading carrier in transpacific flights.[83]

In 1988, the bilateral (though not reciprocal) treaty with Japan was amended to allow additional routes between the two countries. United's application to fly from Chicago to Tokyo, a significant gap in its routes previously, was approved.[84]

United is focusing on its international presence, notably in the People's Republic of China, with nonstop flights to Beijing, Shanghai, and Hong Kong from its hubs in Chicago, San Francisco and Washington, D.C. In September 2007 United was granted a route from San Francisco to Guangzhou.[85] These routes offer a higher proportion of premium fare passengers while being relatively insulated from the cut-throat competition in the domestic market, especially from low-cost carriers. United competes vigorously with discount carriers on about 70 percent of its domestic market. United has also focused more on Latin America, a region from which it had largely retreated in the last decade, and added new destinations and frequencies to Mexico and the Caribbean.

United began service to Bahrain on April 18, 2010.[86] United also began service to Accra, Ghana on June 20, 2010, making it the second-US carrier to fly to all six inhabited continents after Delta Air Lines, which has had that distinction since July 2009.

Codeshare agreements

In addition to its Star Alliance and United Express partnerships, United codeshares and/or marketing agreements with the following airlines as of January 2010:

  • Republic of Ireland Aer Lingus
  • Italy Air Dolomiti
  • United States Gulfstream International Airlines
    operated for Continental Connection
  • United Arab Emirates Emirates
  • United States Great Lakes Aviation

Hub information

Current hubs and focus cities

Continental/Future United hubs

Former hubs, maintenance bases, and focus cities

United's route network has been trimmed and streamlined to a few central hubs, resulting in the closure of these former hubs or de-listing as focus cities:

Fleet

Current

United Airlines operates 360 aircraft with an average fleet age of 13.5 years (at January 11, 2010).[90][91] United also contracts (but does not own or operate) 292 regional jet aircraft, including 38 Embraer EMB 170s, and 100 Bombardier CRJ700s, bringing the total number of aircraft for in operation for United parent UAL Corporation to 652 aircraft [92]. The Boeing customer codes for United Airlines is 7x7-x22. (ie. 747-422)

United Airlines fleet
Aircraft In fleet Orders Option Passengers
(First/Business/Economy Plus/Economy)
Notes
Airbus A319-100 55 0 0 120 (8/0/40/72)
Airbus A320-200 97 0 0 138 (12/0/36/90)
144 (12/0/42/90)
Airbus A350-900XWB 0 25 50 TBA Entry into service: 2016–2019[93][94][95]
Boeing 747-400 25 0 0 374 (12/52/70/240)
347 (14/73/88/172)
To be retired
Replacement aircraft: Airbus A350[93]
Boeing 757-200 96 0 0 p.s. 110 (12/26/72/0)
182 (24/0/50/108)
Boeing 767-300ER 35 0 0 183 (6/26/71/80)
244 (34/0/64/146)
To be retired
Replacement aircraft: Boeing 787[93]
Boeing 777-200 19 0 0 348 (36/0/89/223)
252 (12/49/77/114)
New configuration to receive larger LCD screens,
new seats in all classes, and nose-to-tail AVOD.
The new configuration will not be fitted on
the six domestic-configured 777's
Boeing 777-200ER 33 0 0 253 (10/45/84/114)
252 (12/49/77/114)
New configuration to receive larger LCD screens,
new seats in all classes, and nose-to-tail AVOD.
Boeing 787-8 0 25 50 TBA Entry into service: 2016–2019[93][94][95][96]
Total 360 50 100

Retired

United Airlines Retired Fleet [97]
Aircraft Year retired Replacement Notes
Boeing 80A 1934 Launch customer[98]
Boeing 40A 1937 Launch customer[99]
Boeing 247 1942 Launch customer, all 59 of the base model were built for United[100]
Lockheed L-1011 TriStar[101] 1989 McDonnell Douglas DC-10 Bought from Pan Am; Sold to Delta
Douglas DC-8 1992 Boeing 757-200 Launch customer,[102] Largest DC-8 operator in the world
Boeing 727-100 1993 Boeing 737-500 Launch customer
Boeing 747SP 1995 Boeing 747-400 Bought from Pan Am
Boeing 747-100 1999 Boeing 777-200/200ER
McDonnell Douglas DC-10 2001 Boeing 777-200/200ER Launch customer (along with American)
Boeing 747-200 2001 Boeing 747-400
Boeing 727-200 2001 Airbus A320 family Launch customer
Boeing 737-200 2001 Airbus A320 family Launch customer
Boeing 767-200 2005 Boeing 767-300ER Launch customer
Boeing 737-300 2009 May be replaced with Bombardier C-Series or Embraer Jets[103][104]
Boeing 737-500 2009 May be replaced with Bombardier C-series or Embraer Jets
Boeing 377
Boeing 720
Convair 340
Douglas DC-3
Douglas DC-6
Douglas DC-7
Ford Tri-Motor
Sud Aviation Caravelle 1970 Boeing 737-200
British Aircraft Swallow
Vickers Viscount
Curtiss JN-4D (Jenny)

United was the launch customer for a number of aircraft types, including the McDonnell Douglas DC-10 and several Boeing aircraft: the Boeing 727, the Boeing 737-200, the Boeing 767 and the Boeing 777. Although not a launch customer, jet aircraft operated by United has included the Lockheed L-1011 (received in the Pan Am Pacific Route purchase, later traded with Delta Air Lines for the DC-10 aircraft Delta received in their merger with Western Airlines), Douglas (later McDonnell Douglas) DC-8, and Sud (later Aerospatiale) Caravelle. In 1965, United placed an order for six BAC/Sud (now BAe and Aerospatiale) Concordes but the order was later canceled.

United has stated it would rather wait until the next generation of narrow-body aircraft arrive as they will be able to replace their A319-100, A320-200, and 757-200 fleets at the same time. To cut down on money going out of the franchise, United has retired its entire Boeing 737 fleet. For the long-haul network, United is a possible candidate to order the Boeing 747-8 Intercontinental and the Boeing 777-300ER. On June 3, 2009, United announced they have submitted proposals to both Boeing and Airbus for an order for up to 150 new aircraft. The order is expected to include new widebody aircraft to supplement the current Boeing 777-200/200ER aircraft and new narrow-bodies to supplement United's 96 strong 757-200 fleet.[105] In December 2009, United announced it would to split a 50-aircraft order between upcoming Airbus A350 and Boeing 787 Dreamliner aircraft.[106]

On April 2, 2008, United Airlines temporarily withdrew its entire fleet of 19 Boeing 777-200 and 33 Boeing 777-200ER aircraft until functional testing of the fire suppression system could be completed. The move was the latest in a series of temporary groundings by U.S. airlines in late March 2008 following a Federal Aviation Administration (FAA) review of compliance with airworthiness directives.[107] United has expressed interest in becoming the sole GoldCare maintenance, repair, and overhaul provider for the Boeing 787.[108][109]

The new United Airlines (Post Merger) will take the Continental Airlines globe, and color scheme for all aircraft. The "Continental" title will be replaced with "United" printed across each aircraft.[110]

Cabin

United's current livery, introduced in 2004, on a Boeing 777-200

United offers in-flight entertainment on all mainline aircraft. Audio programming is provided by XM Satellite Radio. The entire fleet features "From the Flightdeck" on channel 9. This program allows passengers to listen to live radio communications between the cockpit and Air Traffic Control. "From the Flightdeck" can be disabled at the pilot's discretion. United also has partnerships with various television networks who provide programming for video-equipped aircraft. The most prominent of these programming partners was NBC, which provided branded "NBC on United" programming. This long-standing partnership ended in early 2009, when NBC signed a two-year deal with American Airlines.[111] Despite the loss of this partnership, United's television entertainment continues to include several prime time NBC programs.

United First

United First is offered on all flights. United First passengers check in at separate counters and can use priority security screening where available. On board, passengers receive a pre-flight beverage service, table linens (on mainline flights) and (on international flight segments only) a five course meal. Passengers are also given priority when boarding, priority baggage handling and access to the International First Class Lounge (on international and p.s. flights only).

United Business

United Business is offered on all internationally configured aircraft and on a few select domestic flights. United Business passengers check in at separate counters and can use priority security screening where available. In-flight service includes pre-departure beverages, table linens and (on international flight segments only) three course meals designed by chef Charlie Trotter. Passengers are also given priority when boarding, priority baggage handling and access to the United Red Carpet Club (on international and p.s. flights only).

United Economy

A United Airlines Boeing 767-300ER in the old livery taxiing at San Francisco International Airport, California. (2009)

Mileage Plus

United mileagepluslogo.jpg

Frequent flier programs started in their current form in 1981. United began one week after American Airlines started the first program. United's program is called Mileage Plus.

Airlines who are part of the Star Alliance and others participate in a program enabling passengers on these airlines to receive Mileage Plus credits. Although Mileage Plus credits are received for all booking classes on United flights, many booking classes on partners are excluded from receiving credit. Exclusions for booking class credits vary for each partner airline.

United Airlines has been criticized recently for so called Starnet blocking. United admitted in a Washington Post article that it prevents its Mileage Plus members, regardless of tier, from redeeming rewards on all Star Alliance flights. United Airlines is currently the only known Star Alliance member to restrict access to reward flights.

Miles earned do not expire, provided that any miles are earned or redeemed at least once every 18 months.

Elite level membership, which has added benefits over the standard level membership, is a feature that was not initially part of the program. Beginning in 2010 Premier, Premier Executive and 1K members have access to unlimited domestic upgrades on a space-available basis.

Premier Associate (3P) is a new elite level created in 2006 that can be gifted by elite members as a reward for reaching certain plateaus. Privileges are much like Premier members and get access to Economy Plus seating, but does not include the 500-mile e-upgrades or the 25% mileage bonus on flown miles.

Premier (2P) members, who accumulate at least 25,000 Elite Qualifying Miles (EQM) or fly 30 segments, are offered priority boarding, free access to Economy Plus seating, upgrade privileges from any fare, complimentary 500-mile e-upgrades and a 25% mileage bonus on flown miles. In 2005, 535,000 members of Mileage Plus qualified for Premier status.

Premier Executive (1P) members fly at least 50,000 EQM or 60 segments, and receive all Premier benefits plus a 100% mileage bonus, higher upgrade priority, access to exit row seating in advance of flight, and lounge access when traveling internationally on any Star Alliance member airline the same day. In 2005, 239,000 members of Mileage Plus qualified for Premier Executive status.

1K (also known as Premier Executive 1K) members fly at least 100,000 EQMs or 100 segments, and receive all Premier Executive benefits plus six free System-wide Upgrades good for a one-class upgrade anywhere United flies, along with the ability to earn confirmed regional upgrades valid across United's North and Latin American route system. 1K passengers are sometimes granted accommodations and meals during flight delays and irregular operations caused by weather or air traffic control. In 2005, 46,000 members of Mileage Plus qualified for 1K status.

Global Services, while not officially part of the Mileage Plus program, is an invitation-only program to recognize United's most valued high-yield customers. Full invitation criteria are not made public by United; re-qualification for current UGS members could be attained by flying 50,000 full-fare miles in a calendar year, according to company letter to members.[115] Benefits complement and expand upon those offered to 1K passengers, including: higher priority for upgrades and front-of-line access in premium security lines. Global Services members are able to upgrade award flights using miles, system-wide upgrades, confirmed regional upgrades and 500 mile upgrade certificates. In 2005, 18,000 members of Mileage Plus qualified for Global Services membership.

Million Miles and Beyond is a program offered to Mileage Plus members who have flown one million miles or more on United Airlines during their lifetime. These customers permanently receive the benefits of lifetime Premier Executive membership.

2 Million Miles and Beyond is a program offered to Mileage Plus members who have flown two million miles or more on United Airlines during their lifetime. These customers permanently receive the benefits of lifetime Premier Executive membership plus lifetime Red Carpet Club membership.

3 Million Miles and Beyond is a program offered to Mileage Plus members who have flown three million miles or more on United Airlines during their lifetime. These customers permanently receive the benefits of lifetime 1K membership plus lifetime Red Carpet Club membership.

500-mile e-upgrades were recently discontinued, in favor of UDUs, Unlimited Domestic Upgrades. Elite members may now get complimentary upgrades on all domestic flight segments (to also include Canada, Mexico, Caribbean, Puerto Rico & St Thomas), based on their elite status, which mirrors the upgrade progression of the former 500-mile e-upgrades. Global Services may get upgraded 120 hours in advance of the departure time of their respective flights. 1Ks at 100 hours; Premier Executives at 72 hours; Premiers at 48 hours. If an upgrade is not actually being offered at that time, the guest will be placed on an upgrade waitlist within those parameters. A UDU is also offered to one traveling companion on the same booking as the elite member (maximum party of two).

Red Carpet Club

The Red Carpet Club is United Airlines' airport lounge. It operates 34 lounges in 27 major airports around the world. Club membership is available to the public for an annual fee, and includes access to all Red Carpet Clubs along with reciprocal access to US Airways Clubs and most Star Alliance Gold lounges, excluding some lounges operated by the Lufthansa group, when traveling on those carriers. Premier, Premier Executive and 1K members of Mileage Plus are offered discounted membership options. Despite being called the Red Carpet Club, the carpet inside the clubs is not always red, such as the blue carpet used at United's Red Carpet Club at Orlando International Airport. The Red Carpet Club features a variety of snacks and drinks.

United International First Lounge

United also offers an International First Lounge which feature snacks and a self-serve bar at several airports. Access is restricted to customers traveling in long haul international first class or P.S. first class. Seven lounges are currently operated in seven different airports worldwide.

United Arrivals Suite

United also offers United Arrivals Suite service which has shower facilities and complementary breakfast. Access is restricted to international United First and full-fare United Business customers. There are presently four Arrival Suite locations including London, San Francisco, Chicago, and São Paulo.

Incidents and accidents

1930s NC13304 Flight 6 NC13317[116] NC13323[117] NC13355[118]
1940s Flight 14 Flight 28 Flight 404 Flight 521 Flight 608 Flight 624
1950s Flight 129 Flight 610 Flight 615 Flight 7030 Flight 16 Flight 409 Flight 629 Flight 718 Flight 736
1960s Flight 826 Flight 859 Flight 297 Flight 823 Flight 389 Flight 227 Flight 266
1970s Flight 553 Flight 2860 Flight 173
1980s Flight 811 Flight 232
1990s Flight 585 Flight 863
2000s Flight 175 Flight 93 Flight 955
2010s Flight 663 Flight 967

In popular culture

See also


References

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