United Airlines' history, corporate structure, and business strategy

United Airlines

Overview of the airline or company (history, corporate structure, aircraft fleet)

United Airlines began as a mail carrying operation in Eastern Washington and Idaho in 1926. As the company began to grow and take on more routes, planes began carrying people in 1927, and coast to coast routes were established. The company was the first to introduce airline stewardesses, as they were called back then, in 1930. Other airlines followed suit and today's flight attendant owes a direct lineage to them. United grew large and larger, merging with other operators as the years passed. Some of these operators include Boeing and Pan-Am Airlines (United Airlines, 2010).

United Airlines filed for bankruptcy protection in December of 2002. The company took advantage of this to renegotiate some of the more harder-won costs like employee benefits and salaries as well as pensions and retirement funds (United Airlines, 2010). The company has survived harsh times for aviation, immediately following the September 11th, 2001 attacks. Many analysts directly attribute United Airline's tough financial times to these attacks.

UAL corporate structure is quite simple. UAL is an airline holding company that is incorporated in Delaware with headquarters in Chicago. UAL owns and operates United Airlines Inc. In 2010, UAL sought approval from the U.S. government for a merger with Continental Airlines Inc. UAL has many significant domestic operations in places like Chicago, San Francisco, Denver, Los Angeles, and Washington D.C. UAL is also currently the largest foreign carrier within China (United Airlines, 2010).

2. Business Strategy

United is currently trying to adapt to ever-changing economic and industry conditions. Its business strategy reflects these conditions, as the company states that it will be "providing the flexibility needed to anticipate and respond to market demand." (United Airlines, 2010) In 2004, UAL unveiled its new livery (paint scheme) with much fanfare, and has pushed forward, promising to reshape its company and operations as the demands of the market change.

According to UAL executive vice president John Tague, "There is literally no bigger symbol for the company than our planes," said John Tague, executive vice president -- Customer. "This livery moves us away from the gray, sending an important signal about where this company is headed, with a focus on improving and on providing our customers with the service and the product that they deserve." (United Airlines, 2004)

UAL has also recently embarked on a global ad campaign to help drum up more business and brand recognition overseas. This has occurred through television, print, and billboard ads in many European and Asian countries as well as in the United States.

3. Discussion (including: Safety Programs, Lawsuits pending, financial problems, merger with another airline etc., federal civil penalties etc.)

United Airlines is continually updating their safety programs on a yearly basis. According to an article in Air Safety Week, United Airlines' senior safety officials were holding meetings to help pin-down better safety policies and procedures for many of their overseas and international flights. This came on the heels of the 9/11 attacks, and as the U.S. Government has stepped in and required more from aviation operators in terms of safety and contingency plans, United Airlines has always been at the forefront of these actions.

One of the largest and most prominent recent lawsuits filed against UAL occurred in September of 2009 (Moreno, 2010). The United States Equal Employment Opportunity Commission accused the air carrier of discriminating against three disabled reservations workers. This suit is still pending. Other recent suits include two filed against UAL for medical treatments that were denied to workers and former employees who were injured on the job, specifically a flight attendant and a ticket window operator. There also exists a very recent lawsuit accusing UAL of trying to reduce competition and raise fares by merging with Continental Airlines, Inc. (Moreno, 2010). It is not clear whether this lawsuit will find its way to the courts.

UAL has been undergone some major financial restructuring since filing for bankruptcy in 2002. The company has since talked of merging with American Airlines, Northwest Airlines, and most recently Continental Airlines Inc. In May of 2010, the merger between UAL and Continental was officially announced, and plans for the merger are currently being carried out (Moreno, 2010). This merger forms the world's largest airline, and its headquarters is in Chicago, Illinois.

5. Conclusions

UAL have a very rich history and are committed to providing its customers with an excellent product and value for their money. The company has recently undergone many changes, but has survived the 9/11 attacks and the recent economic downturn by remaining nimble and adapting to the market demands. This adaptability is certainly one of UAL's strengths, and the vision behind this adaptability has helped to save the airline and the commercial airline industry in the United States. The company's business strategy seems to be working well, now that it has ironed-out recent customer service complaints and other negative press. The company has just merged with Continental Airlines Inc. As long as UAL remains vigilant of its strengths and weaknesses, it will be able to survive in the tough economic climate of today's global air travel industry.