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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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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Background Note

The origins of United can be traced to the mid-1920s. The Air Mail Act, 1925, threw the US aviation sector open to private players. The US government invited bids to operate an air mail service, which was then under the US Post Office Department. Walter T Varney, a businessman, won the contract and created VA...

A Series of Unfortunate Events

United's fortunes changed for the worse in 1970 when it reported a massive (at that time) net loss of US$ 46 million. This came as a rude shock to the company, which had registered a record profit of US$ 45 million just two years earlier.

Higher operational costs and low fares, were cited as main reasons. Also, the market in the 1960s and 1970s was stagnant, offering limited opportunities for growth. The company had also lost money earlier in 1969 in the Civil Aeronautics Board's Transpacific Route Case...


In the first quarter of 2008, United again reported a loss of US$ 537 million. Looking at the losses, it again took some major steps to reduce costs around mid-2008...


Exhibit I: United's Partners under Star Alliance
Exhibit II: United's Logo in 1997 and 2004
Exhibit III: Selected Financial Data for the Period between 1998-2007
Exhibit IV: Some Components of Operating Expenses of UAL and United Between 1998-2008
Exhibit V: Employee Strength Details Of UAL between 2002 And 2007
Exhibit VI: Passenger Revenue of United Between 2003-2007
Exhibit VII: Sources of Revenue and Expenditure in the Second Quarter of 2008

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