note
Continental can trace its history to Varney Air Lines which was delivering mail since 1926. Varney was between 1930 and 1934 absorbed into United Air Lines but separated later and became Varney Air Transport. In November 1937 Continental Air Lines title was adopted and its headquarters were moved to Denver CO. Airline helped with the war effort and after its end acquired Convair CV240s and expanded domestic service. In April 1959 Boeing 707 was delivered to replace airline's DC-7s. It allowed CO to start transpacific flights in from Chicago to Hawaii in September 1969. In May 1970 Boeing 747 was delivered, but these were later replaced with DC-10s. With deregulation, the management style that was successful for four decades was suddenly obsolete, sine fares were no longer controlled. New nonstop routes from Denver were added in 1979, and Continental was able to serve the east coast for the first time. Frontier CEO Alvin Feldman replaced Robert Six as CEO in 1980. Following an unsuccessful takeover of National Airlines in 1979, Frank Lorenzo's Texas Air Corp. launched an unsolicited takeover of Continental in 1981, acquiring 48.5% of shares by March. Feldman tried to counter by creating an ESOP which would have doubled Continental's outstanding shares but keeping the majority of shares in Continental control. The ESOP failed, and by Novemeber 25, Texas Air controlled 50.8% of Continental shares. Frank Lorenzo took over as CEO in March 1982; the shareholder approved the merger of Texas Air and Continental on July 13, and on October 31, Continental and Texas International merged, retaining the identity of the major carrier. The airline began to renegotiate its labor costs with its unions, since its labor costs were high when compared with the rest of the industry. It began with its mechanics, offering a 20% pay increase in exchange for work rule concessions. The result was a strike by mechanics on August 13, 1983, but the airline continued to operate with picket line crossers and replacement employees. In September it offered its unionized employees a stock and profit-sharing program in exchange for $120 million in concessions. The pilot union was not ready to compromise, so airline ceased domestic operations on September 24, 1983 and filed for bankruptcy. International flights continued. Domestic flying resumed three days later, it was serving 25 US cities rather than 78; the DC-10s were parked except for those used in the Pacific. New low fares ($25 per segment) were offered. On October 1, the pilots and flight attendants joined in the strike, resulting in the cancellation of some flights. Within a week, Continental imposed new pilot work and pay rules, and by October 8, many pilots and flight attendants returned to work. The airline continued to build back, strengthening its domestic network with low fares, and increasing its presence in the Pacific. In April 1985, it launched its first flight into Europe, between Houston and London. The airline posted a strong profit in 1984 and a record profit in 1985. While in bankruptcy, Continental was unable to take delivery of some of the new airplanes ordered by Texas Air. These airplanes were either diverted to New York Air, or a newly creased subsidiary, Continental West, which operated between Los Angeles, San Jose, and Seattle from March 20,1985 until June 1986. Continental exited bankruptcy in September 1986, paying creditors 100 cents on the dollar. Meanwhile, parent Texas air was on a run acquiring some commuter carriers, as well as Eastern Airlines in February 1986, and PEOPLExpress in December 1986. Frontier Airlines which was owned by PEOPLExpress and had shutdown in August, sold some of its assets to Continental (including planes) allowing Continental to resume some Frontier routes on November 1, 1986. PEOPLExpress and New York Air were folded into Continental on February 1, 1987. This gave Continental US hubs at Denver, Houston (former Texas International), Newark (former PEOPLExpress), and Cleveland (launched by Continental in 1986). In 1990, Hollis Harris replaced Frank Lorenzo as CEO. The Gulf War which began in 1990 caused fuel prices to take off. Combined with heavy debt service, the airline again filed for bankruptcy on December 3, 1990. Robert Ferguson soon replaced Harris as CEO. The company accepted a buyout by Air Partners, which was led by Texas Pacific Group's David Bonderman and Air Canada. It emerged from bankruptcy in April 1993. Also in 1993 it established a low cost subsidiary, Continental Lite, which operated flights mainly on the east coast. The subsidiary was abandoned in 1995. In 1994, Gordon Bethune became CEO and is credited with turning the airline around "From Worst to First". Continental continued to expand, particularly in international markets while refreshing both its domestic and long range fleet. In 1994, Continental acquired a major portion of America West Airlines as part of the latter airline's bankruptcy reorganization which resulted in a code-sharing agreement between the two carriers. In 1998 Northwest acquired a 14% equity/54% voting stake in continental when David Bonderman (Northwest's CEO) sold his shares which were acquired in the Air Partners deal. DOJ pressured Northwest into selling back those shares two years later, and at the same time, it sold its interest in America West. Continental ended code-sharing with America West in 2002, but began entered into a code-sharing agreement with Northwest and Delta. It joined the Skyteam alliance in 2004 (and later switched to Star Alliance in October 2009) Gordon Bethune retired at the end of 2004, and was replaced by Larry Kellner. In February 2008, it was announced that Continental and United were in advanced merger talks, however those talks had broken down in April. United actively pursued a merger with US Airways, but DOT restrictions on such a combination pushed United back to Continental. In May 2010 it was announced that the two corporations would be combined in a stock swap. The two holding companies merged on October 1, 2010 to form United Continental Holdings. The remainder of the combination took almost 30 months to complete. The FAA certificates of the two airlines were combined on November 30, 2011 (with the Continental certificate surviving). United's reservations were cutover to the Continental system on March 3, 2012, which put an end to flights marketed as Continental. The two carriers continued to operate as separate corporate entities until March 31, 2013, when United was merged into Continental, and Continental changed its name to United Airlines.
founded - demised (age)
April 26 1926 - March 31 2013 (87)
headquarters
Houston Intercontinental Airport, Houston, TX
web
base airports
related operators
current /stored fleet (0)
