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United Airlines

United Airlines (UAL) is an American airline, the second largest in the world. It employs around 84,000 people and operates around 540 aircraft (Jan 2002). Since 1994, 55% of the company is owned by its employees, which makes it the largest employee owned company in the world. In 2001 the company lost $2,137 million on revenues of $16,138 million and in 2002 the company was forced into bankruptcy protection.

United Airlines Airbus A320-200 (N408UA).
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UAL originated in the air mail[?] service of Walter Varney[?], founded in 1926. In only four years the company included a number of airlines, aero manufacturing companies and several airports, it was also closely associated with the new firm of William Boeing[?]. Following the Air Mail Scandal[?] of 1930, by 1934 the company still held its airlines routes but had lost all its non-airline holdings and had a new president in William A. Patterson[?] (who remained in that office until 1963). During WW II United was involved in the training of ground crews and material transportation. Post-war United benefited from the boom in demand, operating out of new operations hub in Denver. The company merged with Capital Airlines[?] in 1965(?), making it one of the largest commercial airlines in the world, in 1968 the company reorganized, creating UAL, Inc., with United as a wholly owned subsidiary. United also began to seek overseas routes in the 1960s, but the Transpacific Route Case[?] (1969) denied them this expansion, it did not gain an overseas route until 1983. The economic turmoil from the 1970s and the pressures of the Airline Deregulation Act (1978) affected the company, with losses and a greatly increased turnover in top management. The company also diversified and changed its name twice before returning to its airline business in 1987. In 1990 the company initially expanded aggresively, but the aftermath of the Gulf War and increased competition led to losses of $332m in 1991 and $957m in 1992. Another reorganization changed the company into majority employee-owned in 1994. In 1997 it joined the Star Alliance with Air Canada, Lufthansa, SAS and Thai Airways. It was among the first to introduce the Boeing 777 twin-jet on trans Atlantic routes.

As part of the September 11, 2001 Terrorist Attack, two United Airlines planes were hijacked, a Boeing 767 that crashed into one of the twin towers of the World Trade Center in New York City, and a Boeing 757 that is suspected to have been directed towards either the White House or Camp David by the hijackers, but which was overtaken by a group of passengers from the hijackers and crashed in a small Pennsylvania town instead.

In December of 2002, UAL Corporation filed for chapter 11 protection against bankruptcy. It has been commented that this development was triggered in part by the repercussions that the aforementioned events had on the North American airline industry as a whole and on United in particular. However the rise of low-cost competitors and problems with unions and within the management structure of the company were also significant. The immediate reason for the filing was the US government's refusal to grant United a $1.5 billion loan from the government airline aid program. The company was then forced to seek debtor-in-possession financing from commercial sources to cover the expected future loses.

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