United Airlines

United Air Lines, Inc., trading as United Airlines, is a major airline of the United States. It is a subsidiary of UAL Corporation with corporate offices in Chicago at 77 West Wacker Drive, and its operations base in nearby Elk Grove Township. United's largest hub is O'Hare International Airport, where it has 650 daily departures. United also has hubs in Denver International Airport, Washington Dulles International Airport, San Francisco International Airport, and Los Angeles International Airport. Its largest maintenance hub is the Maintenance Operations Center at San Francisco International Airport. The airline also maintains focus city operations at Narita International Airport near Tokyo.
As of July 31, 2006, United is the world's second largest airline by revenue-passenger-miles (behind American Airlines), third-largest by total operating revenues (behind Air France-KLM and American Airlines), and fourth-largest by total passengers transported (behind American Airlines, Delta Air Lines and Southwest Airlines). United has 56,000 employees and operates 460 aircraft.
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.
In February 2008, UAL Corporation and Continental Airlines Inc. 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 Airlines and Northwest Airlines. 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. Despite ending merger talks, Continental is reportedly in discussion with United about a possible switch from the SkyTeam Alliance to United's Star Alliance.
On April 28, 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. United pilots vociferously rejected the proposal and vowed to fight it. Star Alliance co-founder Lufthansa Airlines CEO Wolfgang Mayrhuber threw his support behind a marriage of partner carriers United and US Airways.
On June 4, 2008, United announced it would close its Ted unit. The ex-Ted Airbus aircraft will be reconfigured and returned to mainline configuration; to compensate the removal of United's Boeing 737s that are set to be retired, reducing the mainline fleet from 460 to 360 aircraft and furthering the airline's goal of cutting domestic capacity by 15 percent.

History

Beginnings
UAL 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 of Pasco, Washington on April 6, 1926 and returned the following day with 200 pounds of mail. April 6 is regarded in the United Airlines company history as both its own birthday 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 – Transport Corp. 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.
Following the Air Mail Scandal of 1930, the Air Mail Act of 1934 banned the common ownership of manufacturers and airlines. United Aircraft-Transport'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 an airline group—United Air Lines. 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.

Expansion into a national carrier
United's early route system, formed by connecting air mail routes, operated north-and-south along the West Coast, and east-to-west along a transcontinental route from San Francisco via Denver, Colorado to Chicago in the Midwest and on to Washington, DC. The early interconnections during this era became the basis of major United hubs in these cities, and still exist today.
On the night of October 11, 1933, a United Boeing 247 exploded in mid-air and crashed near Chesterton, Indiana, killing all seven 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 found.
During World War II United-trained ground crews modified airplanes for use as bombers, and transported mail, material, and passengers in 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 bomb was planted by a man named Jack Graham who placed the bomb in his mother's luggage with the intent of collecting on her life insurance policy. Graham was executed a year after the explosion.
The company 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. It was explained by his staff that this was done in order to conserve fuel by not having to fly the usual Boeing 707 Air Force aircraft. This however turned out not to be the case as 'Air Force One' flew behind in case of an emergency.

Deregulation
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 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 frequent flyer program, United launched its Mileage Plus. The Wall Street Journal mistakenly reported United's program to be the first.
In 1982, United became the launch customer for the Boeing 767, taking its first delivery of 767-200s on August 19.

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. American Airlines already had a non-merging B-scale for its pilots. 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 pilot.
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. 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.
This struggle cost the airline USD $1 billion, and provoked a long period of labor unrest and financial deterioration that culminated in bankruptcy nearly 20 years later.
Mr. Ferris changed United's parent company's name from UAL Corporation to Allegis in February, 1987 but the name change was short lived. Following Ferris' termination by the board, Allegis divested its non-airline properties in 1987 and reverted to the name UAL Corp. in May, 1988 That helped clear the path for the United Pilots to do an ESOP takeover of United, which eventually did happen in 1994.

Record-setting flight
In 1988, using a 747SP-21 purchased from Pan American World Airways, United flew a 2-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

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--the only Heathrow rights provided to a US carrier subsequent to the Bermuda II Treaty. 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. 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. During this time, American Airlines nearly doubled in size in Miami and Latin America, and as a result, United never saw much success in the region.
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 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. 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 in to 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.

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 was a 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. This scheme allowed members of either frequent flier program to earn miles on both carriers and utilize both carriers' lounges. Delta and United attempted to form an even cozier codeshare relationship, but this was deal was effectively killed by ALPA. 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.
May 2000 also saw a bitter contract dispute between United and its pilots' union. 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
As part of the September 11, 2001 terrorist attacks, two United Airlines planes were hijacked by terrorists affiliated with -al-queda. 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. The latter was suspected to have been directed towards either the White House or the United States Capitol building. Both United and American Airlines were affected on September 11, 2001.

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