United Airlines is the smallest (by a slender margin) of what are now only three major international air carriers based in the US. The business was created in 2010 from the merger of the old United with Continental Airlines. It was until recently the leader by international passengers, having carved out a strong global profile during the 1980s and 1990s through the acquisition of worldwide routes from failing giant PanAm and the creation of the Star Alliance with Lufthansa and other carriers. The path has never been easy. The global airline industry has been in turmoil since 2001 as a result of the economic fallout from terrorist attacks - in which United was a particular victim - cumbersome internal security measures and volatile fuel prices. Until the beginning of 2006, United spent more than two years in bankruptcy protection, struggling to find a way to restructure its finances. All the US carriers agreed that the disappearance of one of the majors would relieve the general pressure across the industry as a whole, but United had to fight hard to ensure it didn't become the fall-guy for its rivals. After several years of on-off negotiations, it finally secured an agreement to merge with rival Continental. Further consolidation among rival carriers eventually pushed it into 3rd place by passenger miles. United's position has been further weakened by a series of unlucky breaks as well as an unerring ability to shoot itself in the foot with PR blunders (including a scandalous incident when a passenger was filmed being dragged screaming from a plane after the airline overbooked the flight). Oscar Munoz stepped down as CEO in 2020, and was succeeded by Scott Kirby. Revenues and profits hit new highs in 2019 with a best-ever topline of $43.3bn, and net income of $3.0bn. That came despite the forced grounding of the airline's 14 Boeing 737 MAX jets. United declared a total of 162.4m passengers carried and 239.4bn revenue passenger miles travelled that year. The following brought new challenges to the industry in the wake of the Covid pandemic. Passenger numbers fell by almost two thirds to 57.8m and revenue passenger miles to 73.9bn. United's revenues plunged to $15.4bn and it reported a net loss of $7.1bn. United is a key member of the Star Alliance, the largest such grouping of international airlines. Partners include Air Canada, Lufthansa, Air New Zealand, All Nippon Airways, Air China, Singapore Airlines and Turkish Airlines. United's frequent flyer scheme, MileagePlus, is operated in a partnership with JP Morgan Chase. United was originally established in the 1920s as a subsidiary of aircraft manufacturer Boeing, but was spun off as a separate company in the 1930s. By 1961 it was the world's largest commercial airline.
Capsule checked 9th July 2021
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Who are the competitors of United Airlines? United's main competitors are the two main US-based international carriers, American Airlines and Delta as well as domestic giant Southwest and other regional and foreign companies. See also Travel & Leisure Sector index for other companies.
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Adbrands Daily Update 26th Mar 2020: America's airlines - one of the sectors hit hardest by the lockdown - are likely to return to some form of partial state ownership under the terms of the government's $2 trillion emergency aid package. The eight main airlines - American, Delta, United, Southwest, Alaska, JetBlue, Hawaiian and Atlas - as well as cargo carriers UPS and FedEx are to share around $25bn of grants to be used exclusively for staffing costs as well as another $25bn of loans. That's considerably more than the total of $15bn they received following the 9/11 attacks. In return they must agree to suspend any staffing reductions until at least the end of September. Terms have yet to be finalised, but in exchange for the grants the government is expected to receive warrants to acquire equity at a future date at a fixed price.
Adbrands Weekly Update 15th Mar 2018: Almost a year after it generated negative headlines around the world for forcibly ejecting an elderly passenger from one of its planes, United Airlines has scored another spectacular own goal. A passenger on a flight this week from Houston to New York was apparently ordered by the flight attendant to stow her pet dog in an overhead compartment rather than under the seat. When the flight landed, the dog was found to have died. "This was a tragic accident that should never have occurred, as pets should never be placed in the overhead bin," said a United spokesperson. "We assume full responsibility for this tragedy and express our deepest condolences to the family and are committed to supporting them." A day later, another dog, transported in the hold this time, with a family flying from Oregon to Kansas City, was mistakenly swapped with another canine and flown to Tokyo.
Adbrands Weekly Update 13th Apr 2017: In an extraordinary act of careless self-harm, United Airlines inflicted untold damage on its brand image last weekend by calling airport security to forcibly remove a passenger from an internal flight out of Chicago's O'Hare airport. Videos of this unfortunate man being literally dragged bloody-faced and screaming from the plane have lit up social media and mainstream news coverage all week. And all through no fault of his own. United had overbooked the flight. When no passengers were prepared to surrender their tickets voluntarily in exchange for a voucher, four were picked at random. Three of these went quietly but the fourth - 69-year-old Asian-American doctor David Dao - refused, leading to absurdly heavy-handed treatment. (We are reminded of the memorable airplane scene in the original movie of Anger Management). Adding insult to injury, the airline merely needed the seats for four of its employees on free passes. As several commentators pointed out, for a comparatively modest increase in the voucher offer, United could almost certainly have persuaded this or another passenger to depart of their own freewill. Instead, the airline has been overwhelmed by millions of dollars of negative media coverage around the globe, just a few weeks after another PR disaster in which it refused to board a 10-year-old girl for wearing "inappropriate" leggings.
United exacerbated an already difficult situation by taking a wholly defensive stance. In his first media statement on Monday, United CEO Oscar Munoz blamed Mr Dao for being "disruptive and belligerent", and said the incident was "an upsetting event to all of us here at United". Not, we imagine, as upsetting as it was for Dao or any other passengers forced to watch his eviction. Missing the point entirely, Munoz apologised for the over-booking and to the three other customers who had to be "re-accommodated", but emphatically not to Mr Dao. He also jumped to the defence of United employees, who had been "left with no choice", he said, but to act the way they did. That stance merely added fuel to the flames. But it's amazing what a $1bn plunge in your market cap can do, combined with the threat of regulatory investigation. On Tuesday, United's share price tumbled by 4% in response to the increased vehemence towards the airline within traditional and social media channels and news that the Department of Transportation was reviewing the case. Even White House press secretary Sean Spicer - pleased no doubt to let someone else take some heat from the media if only for a brief while - said he was "disturbed" to see "another human being treated that way". In a new statement on Tuesday afternoon, Munoz offered a complete turnaround. "It's never too late to do the right thing," he suggested hopefully. "I deeply apologise to the customer forcibly removed and to all the customers aboard." In an odd echo of Spicer's comments, he added, "No one should ever be mistreated this way." Yet another attempt to appease the outrage followed on Wednesday when United said it would compensate all passengers on the affected flight for the cost of their trip.
Adbrands Weekly Update 22nd Oct 2015: Under-performing US airline group United Continental was thrown into turmoil by the hospitalisation of new CEO Oscar Munoz after only a month in the job following a heart attack. It is hoped that he will return to the group but for the time being Munoz is on indefinite medical leave. He has been replaced as acting CEO by the group's legal counsel Brett Hart.
Adbrands Weekly Update 10th Sep 2015: Jeff Smisek stepped down unexpectedly as CEO of US #3 carrier United Airlines, along with the group's two most senior government affairs executives. The resignations were prompted by an ongoing federal investigation into the activities of David Samson, former chairman of the Port Authority of New York and New Jersey, who has been accused of abusing his position for personal and political ends. Among other duties, this body oversees New York's airports, including Newark, where United is the biggest carrier by passenger volumes. Prosecutors allege that United buckled to pressure from Samson to reinstate loss-making weekly flights to an airport in South Carolina near his weekend home in exchange for improved conditions at Newark. The service was cancelled three days after Samson resigned from the Port Authority last year. The airline named former AT&T and Coca-Cola executive Oscar Munoz as its new CEO.
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