UAL Corporation

Last updated
UAL Corporation
FormerlyUAL, Inc.
Allegis Corporation
Company type Public
Nasdaq: UAUA
Industry Transport
FoundedDecember 30, 1968 (1968-12-30)
FounderGeorge Keck
DefunctOctober 1, 2010 (2010-10-01)
FateMerged with Continental Airlines
Successor United Airlines Holdings, Inc.
Headquarters,
Area served
Worldwide
Key people
Glenn F. Tilton, Executive Chairman, President and CEO
RevenueDecrease2.svg US$16,335 Million (2009)
Increase2.svg US$-651 Million (2009)
Number of employees
47,000 (2009)
Subsidiaries United Airlines, Inc.
Footnotes /references
[1]

UAL Corporation is the former name of United Airlines Holdings, an airline holding company, incorporated in Delaware with headquarters in Chicago, Illinois. UAL held a 100 percent controlling interest in United Airlines, Inc., one of the world's largest air carriers, and is a founding member of the Star Alliance. It was announced on May 3, 2010, that UAL Corporation and Continental Airlines, Inc. would pursue a merger pending government approval. UAL Corporation would acquire Continental Airlines, Inc. and change its name to United Continental Holdings (UCH). On October 1, 2010, UCH, formerly UAL Corporation, announced completion of the merger. [2] On Thursday June 27, 2019 United changed the name of its parent company from United Continental Holdings to United Airlines Holdings. [3]

Contents

UAL Corp. passed to its successor its major operations at Chicago-O'Hare, Denver, Los Angeles, San Francisco, and Washington-Dulles. UAL's United Airlines, Inc. held several key air rights, including one of the two American carriers authorized to serve Asia from Tokyo-Narita. UAL's United was the largest U.S. carrier to China and maintained operations throughout Asia. [4]

History

UAL, Inc., was incorporated December 30, 1968 as a Delaware corporation as part of a reorganization of United Airlines, its largest subsidiary, having a storied history. UAL, Inc. was the creation of then United Airlines president George Keck, who formed the holding company to allow United to diversify.

Between 1970 and 1988 UAL, Inc. acquired the Westin and Hilton hotel chains and the Hertz car rental company, as well as a regional airline, a reservations network, and several leasing and insurance companies. On April 30, 1987, UAL, Inc. changed its name to Allegis Corporation. Wall Street analysts believed that Allegis' subsidiaries were worth more individually than valued by the parent company's stock price. Reacting to this opinion just weeks after the company changed its name, a group led by United Airlines employees moved to acquire ownership. However, the group was unable to secure the necessary financing and Allegis' management subsequently divested (sold) its non-airline subsidiaries. On May 26, 1988, Allegis changed its name to UAL Corporation, with United Airlines, Inc. as its sole major subsidiary. [5]

United Airlines employees’ continued effort to buy the airline's parent company was realized in 1993. The Board of Directors of UAL in December 1993 agreed to an Employee Stock Ownership Plan (ESOP), with employees accepting salary and benefit reductions and work rule changes in exchange for stock. Employees gained an equity stake of 55%, thus making them the majority owners of UAL Corporation. UAL became the world's largest employee-owned company.

During the mid-1990s the scheme worked well for UAL. The company was able to stabilize its finances, which had been weakened by the recession earlier in the decade and the divestiture of Allegis' profitable assets. In the late 1990s UAL's United Airlines subsidiary grew to be the world's largest airline, as well as one of the most profitable.

Yet in 2000, UAL's fortunes began to dim. In April 2000, the ESOP investment period ended for most US employees, prompting United's unions to fight for higher wages. Labor issues, air traffic congestion and poor weather forced widespread flight cancellations during the summer of 2000, harming the airline's reputation. Then UAL Corporation announced its intent to merge with US Airways Group, Inc., the operator of US Airways. The deal collapsed in mid-2001, due to opposition from the U.S. government and employees. Then came the tragedy of September 11. The company ended 2001 with a record loss of $2.1 billion. [5]

As losses continued into 2002, Glenn Tilton, a former Texaco CEO with experience operating a troubled company, was brought in by UAL's board of directors to prevent bankruptcy, or, if needed, guide the company through a bankruptcy. Tilton was appointed chairman, President, and CEO of UAL Corporation and United Airlines, Inc. in September 2002. Tilton sought wage cuts from employees and applied for a U.S. government loan guarantee to avoid filing for bankruptcy. By early December, the company had reached agreements with most of its unions for wage reductions, but its loan application was rejected Dec. 4. On Dec. 9, UAL and its subsidiaries filed for Chapter 11 reorganization. UAL quickly received debtor-in-possession (DIP) financing to allow it to continue "business as usual" while it reorganized its debt, capital and cost structures. The year ended with UAL seeking immediate voluntary wage reductions from all employee groups or permission from the bankruptcy court to impose those reductions in order to meet the strict covenants established by the DIP lenders. [5]

What followed was one of the largest, longest, and most complex bankruptcy cases in US history. [6] UAL Corporation and its subsidiaries emerged from bankruptcy protection on February 1, 2006.

On December 8, 2009, UAL Corporation announced an order for 25 Airbus A350 and 25 Boeing 787 aircraft, with purchase rights for 50 more of each.

The years following emergence from bankruptcy garnered mixed results for UAL. The company turned a profit in 2007, but the fuel crisis in the summer 2008, when crude oil briefly reached $147 a barrel, pushed the company into losses. [7] After decades of boom and bust cycles, CEO Tilton pushed for a merger with another major US carrier. Tilton stated that a larger market-share and a more diverse route network was the way for UAL to reach sustained profitability, though many, including UAL's unions groups, strongly disagreed. In early 2008 UAL Corporation held merger talks with American airline operator Continental Airlines, Inc. The deal was called off after problems in the credit markets, as well as weak support from labor groups, prevented the merger. UAL's United then decided to form an alliance with Continental.

In May 2010 United announced a full merger between the two carriers. The combined airline uses the trade name United Airlines with the Continental globe logo.

Directors

The directors of UAL Corporation at the time of the merger were:

Subsidiaries

UAL Corporation World Headquarters, 77 West Wacker Drive in Downtown Chicago UnitedAirlinesBuildingChicagoIL.jpg
UAL Corporation World Headquarters, 77 West Wacker Drive in Downtown Chicago

The company's subsidiaries at the time of the merger were:

Related Research Articles

United Airlines, Inc. is a major American airline headquartered at the Willis Tower in Chicago, Illinois. United operates an extensive domestic and international route network across the United States and all six inhabited continents primarily out of its eight hubs, with Chicago–O'Hare having the largest number of daily flights and Denver carrying the most passengers in 2023. Regional service is operated by independent carriers under the brand name United Express.

Continental Airlines, simply known as Continental, was a major airline in the United States that operated from 1934 until 2012, when it merged with United Airlines. It had ownership interests and brand partnerships with several carriers.

<span class="mw-page-title-main">Continental Micronesia</span> Defunct airline of Guam and Micronesia (1968–2010)

Continental Micronesia, Inc. (CMI) was a Guamanian company which was a wholly owned subsidiary of Continental Airlines. It operated daily flights to Honolulu, Hawaii, as well as international services to Asia, Micronesia and Australia from its base of operations at Antonio B. Won Pat International Airport on Guam, a U.S. territory in the western Pacific Ocean. During its final years, the airline, a Delaware corporation, was headquartered in the old terminal building at Won Pat International Airport in Tamuning, Guam.

US Airways was a major airline in the United States that operated from 1937 until 2015, when it merged with American Airlines. It was originally founded in Pittsburgh as a mail delivery airline called All American Aviation, which soon became a commercial passenger airline. In 1953, it was renamed Allegheny Airlines and operated under that name for a quarter-century. In October 1979, after the passage of the Airline Deregulation Act, Allegheny Airlines changed its name to USAir. A decade later it had acquired Piedmont Airlines and Pacific Southwest Airlines (PSA), and was one of the U.S.'s seven transcontinental legacy carriers. In 1997, it rebranded as US Airways.

<span class="mw-page-title-main">Frank Lorenzo</span> American businessman and corporate raider (born 1940)

Francisco Anthony "Frank" Lorenzo is an American businessman. He managed Continental Airlines and Texas International Airlines between 1972 and 1990, through airline deregulation. Lorenzo also led the creation and management of the holding company for the group, Texas Air Corporation, through which New York Air was formed in 1980 and Eastern Air Lines was acquired in 1986, as well as Frontier Airlines and People Express Airlines.

Texas Air Corporation, also known as Texas Air, was an airline holding company in the United States, incorporated in June 1980 by airline investor Frank Lorenzo to hold and invest in airlines. The company had its headquarters in the America Tower in the American General Center in Neartown Houston, Texas.

Republic Airways Inc. is an American regional airline headquartered in Indianapolis, Indiana, United States. Republic operates and maintains aircraft used on flights that are scheduled, marketed and sold by a partner mainline airline. The company is contracted by American Airlines, Delta Air Lines, and United Airlines.

<span class="mw-page-title-main">AMR Corporation</span> Defunct airline holding company

AMR Corporation was an airline holding company based in Fort Worth, Texas, which was the parent company of American Airlines, American Eagle Airlines, AmericanConnection and Executive Airlines. AMR filed for Chapter 11 bankruptcy protection in November 2011. The company emerged from bankruptcy on December 9, 2013, and at the same time announced that it would merge with US Airways Group to form a new company, American Airlines Group.

<span class="mw-page-title-main">Shuttle by United</span> Defunct low-cost airline of the United States (1994–2001)

Shuttle by United was an "airline within an airline" operated as a subsidiary of United Airlines from 1994 to 2001 along the West Coast of the United States. It operated from San Francisco International Airport and Los Angeles International Airport. Shuttle's fleet consisted of Boeing 737-300s and 737-500s. The service was eventually renamed United Shuttle before it was shut down by United and its aircraft returned to mainline service with the airline.

<span class="mw-page-title-main">US Airways Group</span> Airline holding company

US Airways Group Inc. was an airline holding company based in Tempe, Arizona. US Airways Group operated US Airways, along with its subsidiaries PSA Airlines, Inc. and Piedmont Airlines, Inc., which are wholly owned but marketed under the branding of US Airways Express. It merged with America West Holdings Corporation, parent of America West Airlines, in 2005, and the combined company adopted the better-known US Airways name; the two airlines' operating certificates merged in 2007. It also operates additional companies that provide associated services. ACE Aviation Holdings, the Canadian parent of Air Canada retained a roughly 6.1% investment stake in US Airways Group. The route network covered destinations in 47 states, as well as international destinations.

<span class="mw-page-title-main">Republic Airways Holdings</span> Airline of the United States

Republic Airways Holdings, Inc. is an American airline holding corporation based in Indianapolis, Indiana, that owns Republic Airways, an American regional airline operating in the United States, and LIFT Academy, the only flight training academy owned by an airline in the United States.

<span class="mw-page-title-main">Glenn Tilton</span>

Glenn Fletcher Tilton is a retired American oil and airline industry executive. Tilton spent most of his career working for Texaco, and as CEO guided its merger with Chevron Oil in 2001. He was chairman, president, and CEO of UAL Corporation from 2002 to 2010. He stayed on as non-executive chairman of United Continental Holdings Inc., (NYSE:UAL), the parent company of the merged United Airlines, Inc. and Continental Airlines, Inc. from October 1, 2010, until 2012. Tilton was Midwest chairman and a member of the executive committee at JP Morgan Chase (NYSE:JPM), from June 6, 2011, until his retirement in June, 2014.

<span class="mw-page-title-main">Braniff (1983–1990)</span> Defunct U.S.-based airline, 1984–1989

Braniff Inc. was a US-based airline that operated flights from 1984 until 1989 and was partially formed from the assets of the original Braniff International Airways. The domestic air carrier was originally headquartered at Dallas Love Field in Dallas, Texas, and later Orlando, Florida. The airline is sometimes referred to as "Braniff II".

Global Aviation Holdings Inc. (Global) was the parent company of World Airways, Inc. (World), and North American Airlines, Inc., headquartered in Peachtree City, Georgia, US. Its airline holdings included World and North American along with ATA Airlines until the parent company renamed from Global Aero Logistics to Global Aviation Holdings. ATA, World, and North American all were Part 121 U.S.-certified air carriers providing customized air transportation services for major international passenger and cargo carriers, international freight forwarders, the U.S. military, international leisure tour operators, and international corporations.

Pinnacle Airlines Corporation was an airline holding company in the United States, headquartered in Memphis, Tennessee, and was the parent company of Pinnacle Airlines and Colgan Air until Colgan was closed down in 2012. The company contracted its airlines to fly in the aircraft livery of other airlines such as Delta Air Lines and United Airlines. The company filed for bankruptcy protection under Chapter 11 in 2012 and emerged from Chapter 11 in 2013 as a wholly owned subsidiary of Delta Air Lines. The company's only surviving airline, Pinnacle, became Endeavor Air.

United Airlines Holdings, Inc. is a publicly traded airline holding company headquartered in the Willis Tower in Chicago. UAH owns and operates United Airlines, Inc.

United Airlines is the third largest airline in the world, with 92,795 employees and 948 aircraft. It was the brainchild of William Boeing and emerged from his consolidation of numerous carriers and equipment manufacturers from 1928 to 1930.

American Airlines Group Inc. is an American publicly traded airline holding company headquartered in Fort Worth, Texas. It was formed on December 9, 2013, by the merger of AMR Corporation, the parent company of American Airlines, and US Airways Group, the parent company of US Airways. Integration was completed when the Federal Aviation Administration granted a single operating certificate for both carriers on April 8, 2015, and all flights now operate under the American Airlines brand.

<span class="mw-page-title-main">History of Delta Air Lines</span>

Delta Air Lines is a major American airline. The company's history began with the world's first aerial crop dusting operation called Huff Daland Dusters Inc., founded in 1925 in Macon, Georgia to combat the boll weevil infestation of cotton crops. C.E. Woolman, general manager and later Delta's first CEO, led a group of investors to acquire the company's assets. Delta Air Service was incorporated on December 3, 1928, and named after the Mississippi Delta region.

References

  1. "UAL Corporation Annual Filings (10-K)". Ir.unitedcontinentalholdings.com. Retrieved 2013-01-21.[ permanent dead link ]
  2. "United Continental Holdings, Inc. - Investor Relations - News". Ir.unitedcontinentalholdings.com. Archived from the original on 2012-07-10. Retrieved 2013-01-21.
  3. "United Airlines Strips 'Continental' from parent company's name". Bloomberg News . 27 June 2019. Retrieved 29 June 2019.
  4. United Airlines Fact Sheet, UAL Corporation, November 2009, retrieved September 17, 2010
  5. 1 2 3 Archived June 13, 2011, at the Wayback Machine
  6. The Oil Man in the Jump Seat: How Glenn Tilton is Struggling to Stop United Airlines Crashing, The Economist , September 30, 2004, Retrieved May 28, 2018.
  7. Read, Madlen (11 July 2008). "Oil sets new trading record above $147 a barrel". USA Today. Archived from the original on 18 March 2009. Retrieved 13 February 2009.
  8. "unitedcargo.com". unitedcargo.com. Retrieved 2013-01-21.
  9. "unitedvacations.com". unitedvacations.com. 2013-01-17. Archived from the original on 2013-12-11. Retrieved 2013-01-21.
  10. "unitedsvcs.com". unitedsvcs.com. Retrieved 2013-01-21.