Abstract

United Airlines (United), the first commercial airline in the US, began operations on April 6, 1926. By the 1960s it was one of the largest airlines in the world. However, several problems began to arise in the 1970s, which severely impacted its business. With labor problems and financial losses, the airline found itself struggling to survive. In 2001, the conditions further deteriorated and the company was compelled to file for bankruptcy. Although the operations continued after it came out of bankruptcy, many of the company's cost-cutting measures came in for criticism, for infringing employee rights and benefits.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the problems faced by United from time to time, and how the company dealt with the problems.
• Understand the reasons behind the company's poor performance and analyze its strategies.

Keywords

United Airlines, Commercial Airline, The Airline Deregulation Act, Operational cost, Labor cost, Employee Stock Option Plan, Bankruptcy, Debtor-in-possession financing, Restructuring