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Company Overview and Trend Analysis for UAL Corporation Executive Summary In the following report, I have gathered information on UAL Inc. and current trends affecting the company’s main subsidiary, United Air Lines. I researched the company profile, the company’s financial statements, the marketing, and the management sectors. In the Company Profile, I have given the history of the company and stated the company’s mission statement or purpose. UAL Inc.’s main goal is customer satisfaction. With the use of the 2000 Annual Report, I studied the profitability, liquidity, and asset management. Before the September 11th tragedy, United Airlines was one of the leading airline companies in the world. Unfortunately, the company has endured great losses since that day. Much of its assets are financed through debt. UAL Inc. has engaged in different types of marketing to attract their customers. They have numerous products and services for customers as well as employees. Prices are competitively set, based on the market and United’s competitiors. UAL Corporation successfully spans the entire globe. They advertise their products and services and the customer commitment plan through the use of brochures and pamphlets. They have a pyramid management structure with Jack Creighton at the top. There are numerous types of employees, all of which are required to join unions. Each individual receives company benefits. Many forces have affected UAL Corporation. Such trends include Economic, Technological, Legal and Political, Social and Cultural, and Global. This paper focuses solely on the Legal and Political forces. One major issue that affected United Air Lines is the workers’ strikes that have continued for two years. Another issue is passenger security at airports. Overall, UAL Corporation has suffered great losses since the September 11th tragedy, but is making a steady recovery. Company Profile History United Airlines was established on April 6, 1926, when Mr. Walter T. Varney executed a mail run over a desolate terrain between Washington and Nevada. After the end of the war in 1918, airplanes were used for delivering mail. Airmail became a private operation with the passage of the Air Mail Act of 1925. With Mr. Varney’s expedition, commercial aviation was recognized (History). A series of crucial events occurred following the rise of commercial aviation. A significant advancement was the introduction of the Boeing and Ford Trimotors. Steve Simpson, a Boeing Air Transport employee, proposed a new idea of stewardess service. This service would include nurses serving coffee and sandwiches and comforting fearful flyers. On May 15, 1930, the United subsidiary, Boeing Air Transport, introduced the first stewardess service. Unfortunately, the next event did not have such positive affects. The media accused then postmaster general Walter Folger Brown of organizing a “spoils” conference during the Air Mail Scandal of 1930 (History). Brown wanted to establish airmail routes for the financially stable airlines. As a result of the scandal President Roosevelt ordered all mail contracts to be canceled. United regained all its routes, but lost its president because of his involvement in the Brown scandal. Rather than focus on growth and profitability, United spent the next sixty months serving the military. “United modified warplanes, trained ground crews, and flew thousands of missions to Alaska and across the Pacific to transport soldiers and supplies.” On December 7, 1941, Japan attacked Pearl Harbor. United’s President William A. Patterson said to his employees in a memo, “We have a long and most difficult fight ahead of us (History).” United’s loyalty to the U.S. military paid off; the company earned a good reputation. As the war ended the economy boomed. United claimed its leadership in the commercial aviation industry by acquiring new routes and purchasing its first jet aircraft. United centralized its daily operations in Denver and aircraft maintenance in San Francisco. Service to Hawaii was made possible through the Douglas DC-6, Convair 340, Boeing 377 Stratocruiser, and the Douglas DC-7 transports (History). Since 1941, airfares had been reduced ten percent. The Demand for air travel reached an all time high. President William Patterson moved to chairman and George Keck became United’s new President on September 26, 1963. With Keck’s arrival came second-generation jetliners and United’s first trans-Pacific route beyond Hawaii. Keck also formed UAL, INC., United’s holding company in 1968 (History). Between 1959 and 1969, United became the world’s largest commercial airline when it merged with Capital Airlines. Furthermore, United filed for extensive routes to Asia in an attempt to globalize. But, they were unsuccessful. The Civil Aeronautics Board denied the Transpacific Route. The year 1970 brought bad luck to UAL, Inc. The company reported a net loss of forty-six million (History). The next nineteen years the presidency would pass through six individuals. The company changed its name twice. Many factors contributed to the great loss; higher costs, lower fares, and a flattened market. The Boeing 747 was also introduced too soon. With the arrival of Western International Hotels executives Edward Carlson and Richard Ferris, UAL, Inc., acquired new subsidiaries. Management changed and so did UAL’s image. The Corporation acquired non-airline enterprises. United went beyond U.S. borders to Tokyo. United changed its logo and aircraft livery to reflect its new direction.
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