History Of Continental Airlines

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TOC o “1-3” h z u HYPERLINK l “_Toc377209396” Introduction PAGEREF _Toc377209396 h 1

HYPERLINK l “_Toc377209397” History of Continental Airlines PAGEREF _Toc377209397 h 1

HYPERLINK l “_Toc377209398” Conclusion PAGEREF _Toc377209398 h 8

HYPERLINK l “_Toc377209399” Works Cited PAGEREF _Toc377209399 h 8

IntroductionContinental Airlines, an American airline company has its headquarters in Continental Center 1 in Downtown, Houston, Texas. Based on 2001 revenue passenger miles (RPMs), Continental Airlines is the fifth leading United States airline that transports passengers, mail and cargo all over the world. The company provides its services to more than two hundred international airports in the U. S., Canada, Europe, Latin America, and the Asia- Pacific regions. Most of these international airports are situated in the United States, and has widespread service in Latin America. Its principal flight services are operated in its four business hubs at George Bush International Airport, Hopkins International Airport, Newark Liberty International Airport and Antonio B. Won Pat International Airport in Guam.

History of Continental AirlinesThe history of Continental airlines dates back to 1934, when Walter Varney and Louis Mueller founded an airline company they named Varney Speed Lines. This was their fourth airline; the first having been bought by Boeing’s United Aircraft, and the other two having failed. The Varney Speed Lines operated out of El Paso, Texas and extended through Pueblo, Colorado, Santa Fe, Albuquerque, Las Vegas and New Mexico. The airline started operation with the Lockheed Vega, a plane operating on one engine and carried four passengers. Later the airline operated with other Lockheed planes such as the Lockheed Electra Junior, Lockheed Model 9 Orion and the Lockheed Lodestar.

In 1934, the Roosevelt administration cancelled all domestic airmail contracts but the Southwest Division of Varney Speed Lines won the Pueblo-El Paso route. However the airline lacked sufficient funds to handle its newly won Pueblo-El Paso route. Robert Foreman Six came to their rescue when he bought into the airline with US$90,000 representing forty percent of the company shares. On July 5th 1936, Robert F. Six became the general manager and renamed the carrier to Continental Air Lines on July 8th 1937 and three months later transferred the headquarters of the airline to Denver Union Airport in Denver, Colorado. Robert F. Six’s desire to have the airline fly all over the United States was manifested in his changing of the airline’s name to “Continental”. When he was appointed the president of the Continental Airlines, Six embarked on the expansion plan. Having inadequate funds to buy the then, most popular, durable, and practical plane, the DC-3, he decided to buy several L-14 Lodestars from Lockheed and hired twelve Lockheed stewardesses to staff the acquired planes. Robert Foreman Six was reputed as an aggressive and risk taking executive who forcefully supervised the airline for more than forty years. The other pioneers of the United States airline industry include: William A. Patterson, C. R. Smith, Juan Trippe, Eddie Rickenbacker and Jack Frye.

During the World War II period, the Continental airlines’ maintenance facilities in Denver became a conversion hub. The airline transformed B-17s, B-29s and P-51s for the United States Army Air Force. The military transportation together with aircraft conversion availed adequate profits to the Continental Airlines. This facilitated the expansion plan of the airline. The Continental airline purchased new types of aircrafts which were now accessible in the ensuing war. Among the aircrafts bought included: the DC-3, Convair 240 and the Convair 340. Several DC-3s were purchased as additional military airplane subsequent to World War II. The very first pressurized aircrafts to be operated by the Continental airlines were the Convairs.

During the Second World War, Continental airlines managed to add several routes to its network. Among the new routes were, the route from Albuquerque and Denver traversing Oklahoma, Kansas, and Texas. By the year, 1946, the airline had extended innovative routes, among them being, from Denver to Tulsa, Kansas City, and to Oklahoma City. The other route was from Albuquerque and El Paso to San Antonio. Both routes incorporated in-between stops in a number of the twenty two smaller cities. The 1953 merger with Pioneer Airlines was the first main expansion breakthrough as it enabled the airline to access sixteen extra cities in Texas and New Mexico. The smooth integration of the new routes with the airlines’ post World War II routes prompted the industry regulator, Civil Aeronautics Board (CAB), to consequently streamline Continental’s routes from Denver to the main traffic points in New Mexico, Texas, Oklahoma and Kansas. The problem of limited regional operation disturbed Robert Six a great deal. This made him to enthusiastically petition the Civil Aeronautics Board for longer haul routes to bigger cities. At the same time, he was silently conversing with Boeing to allow his airline to be among the pioneer operators of the soon-to-be-launched 707 jet aircraft which would justify the new routes and vice versa.

The late 1950s saw Robert Six’s strategy succeed and in 1957, Continental airlines flew nonstop and through Denver, from Chicago to Los Angeles. The airline was also able to fly nonstop from Denver and Los Angeles to Kansas City. The permission by CAB to stop operation at various smaller cities on the system enabled the airlines’ innovative aircrafts to operate inexpensively amid points with longer lengths of haul. Before the introduction of its Boeing 707 jets, Continental purchased the admired DC-7s to serve the nonstop routes from Los Angeles to Chicago, from Denver to Los Angeles and from Chicago to Kansas City. In 1960 Continental tripled its passenger-miles than what it had four years earlier. In 1962, Robert six introduced the economy fare principle which seemed to solve the airline industry’s troubles. The principle brought air travel to many individuals who in other terms could have afforded it.

As per Robert Six’s plan, Continental was among the first airlines to operate the Boeing 707. On June 8th 1959, Continental operated its first of five Boeing 707 and Boeing 124 jets that flew from Chicago to Los Angeles nonstop (Norwood and Wegg 62). The introduction of the progressive maintenance program allowed the carrier to fly its Boeing 707 fleet, sixteen hours a day for seven days in a week. This enabled Continental to attain the biggest aircraft utilization compared to all other jet aircraft operators in the industry. Robert also introduced special improvements and luxe gastronomy with his Boeing 707 service which earned the company praise from the Los Angeles Times and the Chicago Tribune as the finest and most luxurious carriers. The early 1960s saw Continental acquire extra routes among them being the nonstop flight from Chicago to Houston with service stops in Phoenix, El Paso, Austin Tucson and San Antonio. The other new service was launched from Denver to Seattle, New Orleans, Portland and Houston with service stops in Oklahoma City, Wichita and Tulsa. The Continental Airline headquarters were transferred from Denver to Los Angeles 1963. In the same period, the Company substituted the Viscount fleet with the more reliable DC-9s from Douglas Aircraft and commenced the insistent purchase of the Boeing 727 aircraft. The two types of aircrafts were utilized by the company for the following twenty years. The company was granted new routes to New Zealand and Australia, in the Transpacific Case, but the Nixon Administration cancelled them later.

During the Vietnam War, the company provided service in cargo and troop shipping for the United State Army and the Marine Corps military to Asia and the Pacific bases. The experience gathered in the Pacific operations helped the company to form a subsidiary Air Micronesia in May 1968. This led to the launching of island hopping routes amid Saipan, Yap, Guam, Majuro, Rota and Honolulu. “Air Mike” as it was called worked with Boeing 727-100 plane which was en suite with open ocean survival gear, a hefty balance of spare parts, a senior mechanic and a doppler radar. Air Micronesia serviced as a supplementary Continental Micronesia up to the year 2010. The company’s major goal of operating from Los Angeles to Honolulu and Hilo was achieved in September 1969. The subsequent year, the company was awarded more routes from San Francisco to Albuquerque and Dallas together with the routes from Seattle and Portland to Hollywood Burbank Airport, San Jose and Ontario, California. All these were the fast growing airline markets.

Continental Airlines, in partnership with the Pan Am and the Trans World Airlines initiated the initial flight of the Boeing 747 aircraft. On June 26th 1970, Continental managed to employ the Boeing 747 in the United States domestic service. Its first class lounge and the main deck won global awards for the best cabin interior and the best meal services in the midst of all airlines. In fact, the company’s Boeing 747 operations from Denver and Chicago to Los Angeles and Honolulu were used to set standard for service delivery in the western United States. The company introduced the wide-body DC-10 service on June 1st 1972 and Robert Six placed a large order for the aircrafts from the manufacturer McDonnell Douglas. These aircrafts operated in the big inter-city markets mainly from Los Angeles to Denver, Chicago, Houston and Honolulu and from Denver to Los Angeles, Chicago, Houston and Seattle. The Boeing 747s concentrated on the Chicago to Los Angeles to Honolulu routes with one round trip to Denver daily. The DC-9 and the Boeing 727 types dominated the remaining routes and sometimes added to the DC-10 markets. The DC-10 helped the company to get the most out of the mushrooming traffic in western U.S. markets.

The Texas Air Corporation run by U.S. aviation industrialist Frank Lorenzo purchased Continental Airlines when the company was experiencing financial difficulties. Lorenzo initiated wage reductions and layoffs to keep the company running (Bamber, Gittell, Kochan and von Nordenflytch 26). The company’s president A. L. Feldman committed suicide in 1981 in his office. Lorenzo became the chairman and CEO of the company and in October 1982, the airline merged with Texas International but retained the name, identity and the brand. In September 1983 Lorenzo took the company into chapter 11 bankruptcy after failing to confer a reduced pay rate with labor unions. This initiative helped Continental from being liquidated although it came with considerable reorganization that was effected immediately. The bankruptcy issue worked well for the company since it recorded a $50 million profit by the end of 1984. In June 1986 the company emerged from the Chapter 11 bankruptcy (Delaney 58). In April 1985 Continental managed to open new routes to Europe with flights from Newark and Houston to London, Paris, Madrid, Munich and Frankfurt. In February 1987, several commuter carriers among them People Express, New York Air and Frontier merged into Continental Airlines ending up with the third biggest U.S. airline.

In December 1990, Continental Airlines filed for its second bankruptcy with the main reason being the escalating jet fuel prices attributed to Gulf War. However, in 1993, Air Canada, Texas Pacific Group and Air Partners invested $450 million in the Continental which saw the company being elevated from bankruptcy. Gordon Bethune became the company’s president in 1994 and ensured a positive transformation project. During the same year Continental began receiving first of ninety two new Boeing 737,757,767 and 777 aircrafts. This was facilitated by Bethune’s “Go Forward Plan”. Continental embarked on expansion program in 1998 and launched operations to Ireland and Scotland. In October the same year, the company acquired its first Boeing 777-200ER aircraft which enabled nonstop flights from Houston and Newark to Tokyo, Japan and another flight from Newark to Tel Aviv, Israel (Bethune 47). In the same year Continental inaugurated partnerships with Northwest Airlines, Avant Airlines, Transbrasil, Copa Airlines and Cape Air. This facilitated the additional interline electronic ticketing, WebTV and Windows CE functionality. In 2001, Continental initiated the nonstop operation from Newark to Hong Kong via North circumpolar route. This was the first nonstop flight for duration of more than 16 hours.

On May 2nd 2010, the directors of Continental and United airlines came up with a deal to merge the two airlines. The new carrier will take on the United Airline name and will be based in Chicago. It will be controlled by the Continental’s CEO, Jeff Smisek and UAL’s CEO, Glenn Tilton as a non-executive chairman (Smith). The two carriers intend to commence merging operations in 2011, and are expected to operate on a single certificate by 2012. The new United will operate on aircrafts such as: Airbus A319s, Airbus A350s, Airbus A320s, Boeing 737s, Boeing 747s, Boeing 757s, Boeing 767s, Boeing 777s and Boeing 787s. The merger will form the second biggest airline in terms of fleet size, second to Delta Airlines.

Continental Airlines, like other flight companies, has also had its share of accidents through time. On May 22nd 1962, an aircraft from Chicago, destined for Kansas City exploded killing all the 45 aboard. January 29 1963, a flight from Midland, Texas crashed and burst into flames. On August 15th 1975, a flight bound for Wichita Kansas, crashed although the passengers and crew were safely evacuated. March 1st 1978, flight 603 from Los Angeles to Honolulu had a tire explosion which resulted to a fire engulfing the plane. The plane was a total loss. November 15th 1987, a flight en route to Boise Idaho crashed during a snowstorm at Stapleton International Airport. July 25th 2000, flight 55 caused Air France Concorde Flight 4590 to crash in Paris. Continental was fined 200,000 Euros and paid Air France a sum of 1 million Euros (USA Today). December 20th 2008, flight1404 ran off the runway during takeoff at Denver International Airport. In this accident, 38 passengers sustained injuries while two of the crew members including the pilot sustained serious injuries.

ConclusionSince its inception, Continental Airlines has managed to maintain the lead in the airline industry despite the numerous challenges the company has had to confront. Its future however seems brighter than it past. On 1st October 2010, UAL Corporation, the parent company of the United Airlines, finalized the acquisition process of Continental airlines and almost immediately altered its name to United Continental Holdings, Inc. These airline companies are in the course of amalgamating their flight services under the name United Airlines (Vietor 64). During the assimilation period, the two airlines will, for a while, run individual operations but under a joint leadership team of the latest parent company headquartered in Chicago.

Works CitedBamber, G., Gitrell, J. Kochan, T and von Nordenflytch. Up in the Air: How Airlines CanImprove Performance by Engaging Their Employees. Ithaca, NY: Cornell UniversityPress, 2009. Print.

Bethune, Gordon. From Worst to First: Behind the scenes of Continental’s remarkablecomeback. New York: Wiley & Sons, 1999. Print.

Delaney, Kevin. Strategic Bankruptcy: How Corporations and Creditors Use Chapter 11 toTheir Advantage. Los Angeles, CA: University of California Press, 1999. Print.

Norwood, Tom and Wegg, John. North American Airlines Handbook. Sandpoint, ID: AirwaysInternational, 2002. Print.

Smith, Aaron. “United and Continental to Merge.” CNN Money. 3 May, 2010. Web. 4 April,2011.<http://money.cnn.com/2010/05/03/news/companies/United_Continental_merge/index.htm?hpt=T3>.

USA TODAY. “Judge places Continental under investigation in Concorde crash.” 10 March,2005. Web. 4 April, 2011. <http://www.usatoday.com/travel/news/2005-03-10-continental-concorde_x.htm>.

Vietor, Richard. “Contrived Competition: Airline Regulation and Deregulation, 1925–1988.” TheBusiness History Review, 64.1 (1990): 61-108. Print.