United Airlines Case Analysis

Topics: Airline, Delta Air Lines, Continental Airlines Pages: 4 (1671 words) Published: February 24, 2013
Business Strategy
1. United Airlines is owned by the UAL Corporation and was incorporated on December 30, 1968. The actual company was formed may years before this actually in 1925 and was a private mail carrying service between Pasco, Washington, and Elko, Nevada, and from these humble beginnings they formed a were able to start a company that would come to be a global leader in the airline service. From the 1960’s to the 1980’s the company had 6 different presidents and started to expand and venture into different aspects of business other then airlines and were unable to have any success. These companies that they purchased were not a success and were later resold. During the late 1980’s United purchased the Pan American Airways pacific Division and by October of 1990 they announced that they were going to purchase the Pan American Routes between London and the United States. With the overspending for the Pan American routes the company suffered record losses and had to work for many years to recoup the cost. They sold the flight kitchens and initiated a hiring freeze and although they were able to save the company $400 million this was still not enough to recoup the losses they had been suffering. At this point is when the company’s president, CEO, and other persons from the upper management stepped down from their positions and created an Employee Stock Option Plan and the employees gave up partitions of their benefits and salaries for stock in the company. By 1994 it was now the largest employee-owned business in the world and the employees all over the world had a seat at the board and we able to be influential in the decisions that the company was making. In 1995 the company partnered up with other leading airline companies to form the Star alliance. This put United Airlines in the position to be able to compete in the global market and had reported earnings in the next 3 years higher then the company has ever had. But with the declining...
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