Turbulent Times for United Airlines
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Case Details:
Case Code : BSTR308
Case Length : 17 Pages
Period : 1970-2008
Organization : United Airlines
Pub Date : 2009
Teaching Note :Not Available
Countries : United States
Industry : Aviation
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"This environment demands that we and the industry act
decisively and responsibly. At United, we continue to do the right work to
reduce costs and increase revenue to respond to record fuel costs and the
challenging economic environment."1
- Glenn Tilton, Chairman, President and CEO, UAL Corporation2
and United Air Lines Inc., in June 2008.
"No matter how rough the ride for United's employees and
passengers, it will continue to be smooth sailing in the executive suite."3
- Joe Brancatelli, Business Travel Columnist, Seat 2B,4 in
June 2008.
"I think it's the UAL labor-dynamic playbook. It's been
that way for a long time. Just change 2008 to 2000 and it was roughly the same
story."5
- Robert Mann, Aviation Consultant, in August 2008.
Introduction
In April 2008, United Airlines (United), one of the oldest and largest airlines
in the United States, reported a loss of US$ 537 million for the first quarter
of 2008 compared to a loss of US$ 152 million in the corresponding quarter of
2007.
The loss was reported to be the highest ever incurred by any airline in the
first quarter.6
The company cited increasing fuel prices as the main reason for
the loss, as its expenses had shot up by US$ 618 million.7
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Turbulent Times for United Airlines
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