UNITED AIRLINES, INC.

If it's a continent, chances are it was accessible via Continental Airlines. The carrier served about 140 US destinations and another 135 abroad from hubs in Cleveland, Houston, Newark, and Guam (hub of Continental Micronesia). Its network included regional flights by subsidiary lines. Continental had about 350 jets and more than 250 regional aircraft. It extended its offerings through code-sharing with fellow members of the Star Alliance, led by United Continental's United Air Lines (now defunct as well), Lufthansa, and Air Canada. (Code-sharing allows airlines to sell tickets on one another's flights.) In fall 2010 Continental was acquired by United parent UAL Corp. in a $3 billion stock swap to create United Continental Holdings.

The deal transformed Continental and United into sister subsidiaries of the new United Continental (formerly UAL Corp.). United Continental ranked as one of the world's largest air carriers, approximately 8% larger than Delta Air Lines in worldwide traffic, garnering more than a 20% share of the US market. At that time, United Continental was largely owned by United Continental shareholders (55%), with Continental shareholders holding a 45% stake. Continental retained its logo and branding, as well as its sizeable hub in Houston until early 2012 when all flights and aircraft were rebranded United.

The air carrier combination aimed to build market share, as well as cut costs and increase revenues. United and Continental had almost 15 routes that overlap; United added its strength in Asia/Pacific markets to Continental's presence in Europe and Latin America. Continental flew to about 135 cities that United didn't serve, and United flew to about 100 cities that Continental didn't. While passengers benefited from expanded access to destinations, the deal promised to stabilize the US airline industry by reducing capacity and giving all carriers freedom to raise fares.

The merger was spurred, in part, by the acquisition of Northwest by Delta in late 2008. Continental subsequently broke with SkyTeam (which included Air France, Alitalia, Delta, and KLM) to enlist in the Star Alliance. Continental's membership in the Star Alliance gave it a more prominent role than it had as a SkyTeam member. Continental's move grabbed more of the international revenues (shared among Star Alliance members), as well as gave it a better grip on the lucrative New York City market through its hub in New Jersey.

The airline industry's troubles -- brought on by volatile fuel prices, a sharp drop in travel and freight demand, and the global economic recession -- were another motivation for consolidation. To recoup losses during the economic downturn, Continental implemented fees for extra services, such as checking baggage, to offset the drop in ticket sales. Additionally, Continental had been working to wring costs from its regional operations. After negotiations with former subsidiary ExpressJet for regional service fell apart, Continental scaled back its contract with the carrier and signed up with Chautauqua Airlines, a unit of Republic Airways Holdings, as a second main regional carrier. Both airlines flew as Continental Express.

Champlain Enterprises and Colgan Air also flew about 15 twin-turboprop planes each under the Continental Connection banner. Colgan added an additional 15 aircraft through 2011.

With a decrease in domestic demand, the company benefited from growing demand for international travel, where price competition on many routes is less fierce than in the US. The carrier sought and won the right to fly nonstop routes between the US and Shanghai, China. Through its subsidiary Continental Micronesia, the airline lead US carriers in flights to Japan. Through a joint venture with All Nippon Airways (renamed ANA Holdings), which was approved by both the US Department of Transportation and the Japanese government in late 2010, the carrier developed more flight schedules between the Americas and Asia.

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UNITED AIRLINES, INC.


233 S Wacker Dr
Chicago, IL 60606-6462
Phone: 1 (872) 825-4000
Fax: 1 (713) 3245940
www.continental.com

STATS


  • Employer Type: Subsidiary
  • Managing Director: Alex Savic
  • Managing Director Scheduling: Grant Whitney
  • Managing Director International And Long Range Planning: Brian Znotins

Major Office Locations

  • Chicago, IL

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