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United Airlines Presentation

for International Management Class
by

Richard Hatch

on 17 May 2010

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Transcript of United Airlines Presentation

Brian Carlson
Richard Hatch
Matt Kelly
Brian Kirkendall
3,300* flights a day on United and United Express
More than 230 U.S. domestic and international destinations
Hubs in Los Angeles, San Francisco, Denver, Chicago and Washington, D.C.
Key global air rights in the Asia-Pacific region, Europe and Latin America,
Founding member of Star Alliance (1,077 destinations in 175 countries worldwide)
46,000 employees
Oldest commercial airline in the United States (originally Varney Airlines, Boise, Idaho)
1968 - UAL created
1978 - Airline Deregulation Act
1997 - co-founded Star Alliance
2001 - September 11 terrorist attacks (2 United flights)
2002 - entered bankruptcy protection in December
2003 - launched low-cost Ted Airlines (discontinued in 2009)
2006 - exited bankruptcy protection in February
Key Facts History United Airlines The Airline Industry Other Considerations
High Government Regulation
Security Concerns are a Constant
Margins are Small Size Matters "We are in an industry where size matters. When you're trying to sell to the corporate customers that you can get their executive from Houston to Frankfurt on Wednesday and to Dubai on Thursday, you've got to have a network large enough to do that - every day." - Captain Jay Pierce, Continental Airlines State of the Industry United in the U.K. Bermuda II Open Skies Mergers This 2008 agreement allows any airline of the European Union and any airline of the United States to fly between any point in the European Union and any point in the United States.

Most importantly, it replaced and superseded previous agreements, like Bermuda II.

More carriers means lower profits
Competition undercuts prices
Competition diminishes volume





There is an upside – increased opportunities for partnerships
Aer Lingus, for example


Recent Past:
February 2008 - Continental ends advanced merger talks (merger aimed to combat Delta/Northwest merger)
April 2008 - news breaks that United was engaged in merger talks with U.S. Airways This Year:
April 7 - NYT reports United and U.S. Airways are engaged in serious merger talks
April 14 - Reuters reports United and Continental are engaged in serious merger talks
April 22 - U.S. Airways announces it will not pursue further negotiations with United
Why Continental Airlines? Currently 2nd largest airline in country behind American
Merger would become largest airline in the world
Complementary strengths and weaknesses in coverage
Company cultures would work well together (unions, etc.)
Being able to offer worldwide coverage to entice large corporate contracts (think of a Houston-based fortune 500 company)
Specifically in regards to the U.K. = almost certainly double number of passengers that could be delivered to Heathrow and other airports each day Bilateral agreement between the U.S. and U.K. whereby a combined four airlines from the U.K. and U.S. were allowed to operate flights between London Heathrow and the U.S.
The American carriers were originally TWA and Pan Am.
American Airlines bought TWA's rights
United Airlines bought Pan Am's rights in 1991



Why was this good for United? Limited competition, and London is seen as a premiere business destination.
Partnerships Matter
Code Sharing Airline Alliances Appendix Continental Airlines United Airlines
Full transcript