UAL Corporation

UAL Corporation
Company type	Public
Industry	Airline holding company
Founded	30 December 1968; 57 years ago
Defunct	1 October 2010
Fate	Merged with Continental Airlines to form United Continental Holdings
Headquarters	Chicago, Illinois, United States
Key people	Glenn F. Tilton (Chairman, President, and CEO)
Products	Airline services (United Airlines)

UAL Corporation was the previous designation of United Airlines Holdings, an airline holding entity incorporated in Delaware and headquartered in Chicago, Illinois. UAL possessed complete ownership of United Airlines, Inc., recognized as one of the globe’s largest airlines and a founding participant in the Star Alliance. On May 2, 2010, UAL revealed intentions to merge with Continental Airlines, Inc., subject to regulatory approval. Under this plan, UAL would acquire Continental and adopt the name United Continental Holdings (UCH). The merger finalized on October 1, 2010. Subsequently, on June 27, 2019, the parent company updated its brand from United Continental Holdings to United Airlines Holdings.

UAL maintained key operational hubs at Chicago-O'Hare, Denver, Los Angeles, San Francisco, and Washington-Dulles. United Airlines held substantial air traffic rights, notably as one of two U.S. airlines authorized to operate flights to Asia via Tokyo-Narita. It was the leading U.S. carrier serving China and operated an extensive network across Asia.

History

UAL, Inc. was established on December 30, 1968, as a Delaware corporation during a corporate restructuring of United Airlines, its principal subsidiary. Initiated by United Airlines president George Keck, UAL, Inc. was formed to facilitate business diversification.

From 1970 through 1988, UAL expanded by acquiring hotel chains such as Westin and Hilton, the car rental company Hertz, a regional airline, a reservation system, along with various leasing and insurance businesses. On April 30, 1987, UAL rebranded as Allegis Corporation. Market analysts considered Allegis’ subsidiaries undervalued compared to the parent’s stock price. Shortly thereafter, a consortium led by United employees attempted a buyout but failed to secure adequate financing. Allegis then divested its non-airline assets and on May 26, 1988, reverted its name back to UAL Corporation with United Airlines as its primary subsidiary.

In 1993, employees of United Airlines successfully gained majority control through an Employee Stock Ownership Plan (ESOP), acquiring 55% ownership by accepting reductions in wages and benefits. This transaction made UAL the largest employee-owned enterprise worldwide. The mid-1990s brought financial recovery following recession impacts and asset sales. By the late 1990s, United Airlines had become the largest global airline and ranked among the most profitable.

Nevertheless, in 2000 UAL encountered difficulties: the ESOP’s investment period concluded leading to union demands for wage increases; operational disruptions impaired its reputation; and a proposed merger with US Airways faltered due to opposition from government regulators and employees. The September 11 attacks further weakened financial stability, resulting in a $2.1 billion loss in 2001.

To address ongoing financial challenges, Glenn Tilton—formerly CEO of Texaco—was appointed chairman, president, and CEO in September 2002 with the objective of avoiding or managing bankruptcy. Despite union wage concessions, a government loan guarantee was denied in December 2002. Consequently, UAL filed for Chapter 11 bankruptcy protection on December 9, securing debtor-in-possession financing to continue operations while restructuring debt and reducing costs. The company sought additional voluntary or court-mandated wage reductions to satisfy lender conditions.

This process resulted in one of the most extensive and intricate bankruptcies in U.S. corporate history; UAL emerged from bankruptcy protection on February 1, 2006.

On December 8, 2009, UAL announced orders for 25 Airbus A350 aircraft and 25 Boeing 787 jets, with options for an additional 50 of each model.

Following emergence from bankruptcy, financial performance fluctuated: profits returned in 2007 but were reversed during the fuel crisis of 2008 when oil prices surged near $147 per barrel. CEO Tilton championed a merger strategy aimed at achieving sustainable profitability through expanded market presence and diversified routes despite resistance from labor unions.

In early 2008, merger negotiations with Continental Airlines collapsed due to credit market constraints and union opposition; however, an alliance agreement was established instead.

On May 2, 2010, United announced a full merger with Continental Airlines. The combined company retained the United Airlines brand name while adopting Continental’s globe emblem; the merger was completed by October 1, 2010.

Directors

At the time of the merger, the board of directors for UAL Corporation consisted of:

Glenn F. Tilton, serving as Chairman, President, and CEO
Wendy Morse, representing the Pilots' Union
Stephen R. Canale, from the Machinist & Aerospace Workers union
W. James Farrell
David J. Vitale
Robert D. Krebs
Steve Miller
James J. O'Connor, who held the position of Lead Director
Mary K. Bush
John H. Walker
Richard J. Almeida
Walter Isaacson
Jane F. Garvey

Subsidiaries

At the time of the merger, UAL’s principal subsidiaries encompassed:

United Airlines, Inc. including United Cargo operations
- Covia, LLC
- Domicile Management Services, Inc., which was also a subsidiary under Air Wis Services
- Kion de Mexico, S.A. de C.V
- Kion Leasing, Inc.
- Premier Meeting and Travel Services, Inc.
- UAL Loyalty Services Inc., responsible for managing loyalty programs and travel clubs such as United Cruises
  - Mileage Plus Holdings Inc.
    - Mileage Plus Marketing, Inc., overseeing the Mileage Plus frequent flyer program administration
  - ULS Ventures, Inc.
- United Airlines Ventures, Inc.
- United Aviation Fuels Corporation, handling fuel procurement
- United Cogen, Inc., involved in cogeneration and power projects
- United GHS, Inc., providing ground handling services
- United Vacations Inc.
- United Worldwide Corporation

Air Wis Services, Inc.
- Air Wisconsin, Inc., distinct from the separate Air Wisconsin Airlines Corporation
- Domicile Management Services, Inc.

Four Star Insurance Company, Ltd.
Four Star Leasing, Inc.
UAL Benefits Management, Inc.
UAL Company Services Inc.

References

Garvey, William and David Fisher. The Age of Flight: A History of America's Pioneering Airline. Greensboro, NC: Pace Communications, 2002.

External links