Early history , founder of predecessors of
United Airlines and Continental Airlines, 1921 networks per the
Civil Aeronautics Board case approving the merger
Varney Speed Lines (named after one of its initial owners,
Walter T. Varney, who was also a founder of
United Airlines) was formed in 1934, operating
airmail and passenger services in the
American Southwest over a route originating from
El Paso and extending through
Albuquerque,
Santa Fe, and
Las Vegas, New Mexico, to
Pueblo, Colorado. The airline commenced operations with the
Lockheed Vega, a single-engine plane that carried four passengers. Varney was awarded a 17-cent-rate airmail contract between Pueblo and El Paso; it carried passengers as a sideline. Following
cancellation of all domestic airmail contracts by the
Roosevelt administration in 1934,
Robert F. Six learned of an opportunity to buy into the Southwest Division of Varney Speed Lines which needed money to handle its newly won Pueblo-El Paso route. Six was introduced to Louis Mueller (who would serve as chairman of the board of Continental until February 28, 1966). Mueller had helped found the Southwest Division of Varney in 1934 with Walter T. Varney. As an upshot of all this, Six bought into the airline with US$90,000 and became general manager on July 5, 1936. The carrier was renamed Continental Air Lines (later changed to "Airlines") on July 8, 1937. Six relocated the airline's headquarters to Denver Union (later Stapleton) Airport in
Denver in October 1937. Six changed the name to "Continental" because he wanted the airline name to reflect his desire to have the airline fly all directions throughout the United States. During World War II, Continental's Denver maintenance base converted
Boeing B-17 Flying Fortresses,
Boeing B-29 Superfortresses and
North American P-51 Mustangs for the
United States Army Air Forces. Profits from military transportation and aircraft conversion enabled Continental to contemplate expansion and acquisition of new airliners after the war. Six petitioned the
Civil Aeronautics Board (CAB) for longer routes to larger cities, hoping to transform the regional into a trunkline like
United Airlines,
TWA, and
American Airlines. He was discussing with
Boeing for Continental to become one of the first to operate the soon-to-be-launched
707. The timing was crucial, since new routes would justify the 707s, and vice versa. In 1958 Continental began turboprop flights with the
Vickers Viscount on the new medium-haul routes. The British-manufactured Viscount four engine turboprop, which Continental referred to as the "Jet Power Viscount II", was the first turbine powered aircraft operated by the airline with Continental claiming it was "First in the west with jet-power flights". The CAB permitted Continental to drop service at many smaller cities, enabling the carrier's new aircraft to operate more economically on longer flights. In 1960 Continental flew more than three times the passenger-miles it had in 1956. (
Aviation Week June 22, 1959: "Continental's current re-equipment program—involving a total cost of $64 million for the Boeings, Viscounts and DC-7Bs—was launched in 1955 when the carrier's net worth amounted to $5.5 million.") During the late 1950s and early 1960s, Six was the airline industry's leading lower-fare advocate. He predicted that increased traffic, not higher fares, was the answer to the airline industry's problems. To amazement from the industry, he introduced the
economy fare on the Chicago-Los Angeles route in 1962. He later pioneered a number of other low or discount fares which made air travel available to many who could not previously afford it. One of Continental's early innovations was a system-wide economy excursion fare which cut the standard coach fares by more than 25%. Green flew with Continental for 13 years from 1965 until his retirement in 1978. at Los Angeles in 1987 In 1974, after years of delays and legal proceedings, Continental started flights between Houston and Miami, and on May 21, 1976, Continental was authorized to operate long-sought routes between San Diego and Denver. President
Jimmy Carter and Civil Aeronautics Board chairman
Alfred Kahn had been promoting deregulation of the airline industry, which would dissolve the CAB and for the first time in industry history allow U.S. carriers to determine without government supervision where they would fly, and how much they could charge. Continental began flights from Denver to Miami/Ft. Lauderdale and Tampa/St. Petersburg in Florida. That year, President Carter authorized Continental to begin daily round trips between
Air Micronesia destination
Saipan and Japan, and approved a route for Continental from Los Angeles to Australia via
Honolulu,
American Samoa, Fiji, New Zealand and Australia. The South Pacific service began May 1, 1979. With the Airline Deregulation Act the world changed for Continental as noted by Smithsonian historian R.E.G. Davies: "Unfortunately, the policies that had been successful for more than forty years under (Robert) Six's cavalier style of management were suddenly laid bare as the cold winds of airline deregulation changed all the rules -- specifically, the balance between revenues and expenditures." In three letters left to his children, Feldman said he had been depressed since the death of his wife the previous year. Lorenzo became Continental Chairman and CEO in March 1982. He and his team viewed the company as stuck in the pre-deregulation era and in need of serious changes to be competitive. Continental was experiencing significant financial challenges both before and after Texas Air's takeover, and management showed how Continental could not compete and survive with its cost structure. The pilots union agreed to some cost reductions in mid-1982, primarily through modest productivity improvements, but there was no progress with the other unions. On October 31, 1982, following approval by shareholders of both companies, Continental merged operations with
Texas International, retaining the Continental identity and offering service to four continents (North and South America, Asia and Australia) with a fleet of 112 aircraft. Continental launched its frequent flyer program, initially called Travel Bank, in September 1982, following that of Texas International Airlines in 1979, which was the industry's first frequent flyer program, and American Airlines
AAdvantage program in 1981. In mid-1983, Continental relocated its headquarters to Texas International's base in Houston, Texas, which resulted in a large expansion of its hub at
Houston Intercontinental Airport and extensive new routes to Mexico and the south central U.S. American planned massive, rapid growth through new hires at starting pay 50 percent lower than existing contracts and equitable with low-cost, startup carriers and well below Continental's pay rates. American was already one of Continental's main competitors, operating a larger hub 250 miles north of Continental's southern hub in Houston and the growth that was funded by the lower pay rates was larger than all of Continental at the time. In 1983, Continental went to its unions to restructure labor costs to compete with the startup carriers and American's Plan B labor costs. After 19 months of negotiations, the International Association of Mechanics and Aerospace Workers went on strike in August 1983, even though the company was offering 20 percent pay raises in return for substantial productivity improvements. Continental was able to operate through the strike because many mechanics crossed picket lines and Continental hired new mechanics. The company continued to negotiate with the pilots and flight attendants and management gave a final proposal to its pilots in mid-September, which would have provided ownership by the pilots and other employees of 35 percent of the company's stock in return for meaningful wage and productivity changes. With no agreement, Continental filed Chapter 11 bankruptcy on September 24, 1983, and shut down for three days. Continental was the first airline to file for bankruptcy with a plan to continue operating as it did continuously starting September 27, 1983. Airline unions fought Continental at every step. On October 1, 1983, the pilots and flight attendants joined the IAM, which was still on strike. When Continental resumed service three days after filing Chapter 11, it initially served 25 cities versus the more than 70 cities previously. In the initial stages of bankruptcy, with no legal agreement that would allow travel agents to book flights, passengers could only book directly with the airline. And, with no credit card agreements, Continental could only accept cash for travel. Continental began offering flights for only $49 for each nonstop segment, raising it later to $75 on any segment. In the federal courts, the unions unsuccessfully sued to stop the company's reorganization. They were later successful in working to persuade Congress to pass a new bankruptcy law preventing bankrupt companies from terminating contracts as Continental had successfully done, but the law was too late to affect Continental. Chapter 11 saved the company from liquidation, but required substantial reorganization, which began immediately. Following bankruptcy, Continental was freed of its contractual obligations and imposed a series of new labor agreements on its union workers, sharply reducing the airline's labor costs. Continental's senior management also reduced their salaries to those of the pilots. The pilot strike was ultimately unsuccessful due to Continental pilots and new hires who crossed the picket line, and customers who voted with their pocketbook. Continental became vastly more competitive with the new airline startups then emerging and thriving in the southwestern U.S. By the end of 1984, Continental had grown back to be a larger airline than pre-bankruptcy and that year recorded a $50 million profit. Continental was the first airline to largely gradually replace a pilot workforce and the working pilots ultimately voted the union out. On April 28, 1985, Continental inaugurated its first scheduled service to Europe with flights from Houston to London/Gatwick. Additional service from Newark to London and Paris started after the airline's merger with PeopleExpress Airlines in 1987. With that merger came significant customer service issues, especially in the Northeast, for a period of time. In October 1985, Texas Air Corp. made an offer for a Denver-based regional carrier,
Frontier Airlines, opening a bidding war with
PeopleExpress, which was headed by Lorenzo's former Texas International associate
Don Burr. PeopleExpress paid a substantial premium for Frontier's high-cost operation. The acquisition, funded by debt, did not seem rational to industry observers from either the route integration or the operating philosophy points of view. with improved asset and cash flow positions and a more competitive route structure with routes radiating to every large U.S. city from major hubs at Denver and Houston. On February 1, 1987,
People Express,
Frontier,
New York Air, and several commuter carriers were merged into Continental Airlines to create the sixth largest airline in the world and became the largest low-fare airline by introducing the industry's first non-refundable airfares, initially called MaxSavers. The mergers and the aggressive marketing led to Continental becoming an even larger player in the northeastern markets. 1987 saw the creation of Continental's OnePass frequent flier program (jointly with
Eastern Airlines); and, in 1988, Continental formed its first strategic partnership (and the first international
airline alliance of its kind) with
Scandinavian Airlines System (SAS). The airline also eliminated first class service—and only the second global carrier to take that action—giving business class passengers the same first class seats, a service change later to be marketed as Business First.
1990s in the
Meadowlands Sports Complex, which is located near its New Jersey hub, in 1996. It held these rights until 2007. On August 3, 1990,
Scandinavian Airlines System (SAS) and Texas Air announced that Jet Capital Corporation, which owned controlling interest in Texas Air, was selling its interest to SAS. Under the agreements, Lorenzo would be leaving the active management of the airline as CEO for the first time in 18 years and would remain on the board of directors for two further years. At the same time,
Hollis Harris, formerly President of Delta Air Lines, was named chairman and chief executive officer. . The type was retired in 2001. On December 3, 1990, due to the 1990
Iraqi invasion of Kuwait and the resultant
Gulf War, which had prompted a dramatic increase in the price of jet fuel, Continental filed for bankruptcy. In mid-1991 Harris was replaced as CEO by Robert Ferguson, who had been a Texas Air executive. In November 1992, Continental accepted a $450 million buyout offer from an investor group composed of Air Partners, an investor from Texas led by Texas Pacific Group, and Air Canada. Under the arrangements, Air Canada would have 24 percent of the voting stock, while Air Partners would hold 41 percent of voting interest in the reorganized Continental. Continental emerged from bankruptcy in April 1993. in April 2008. In March 1993, the airline cancelled its services to nine U.S. destinations and six non-U.S. destinations, including all 24 weekly services between the United States and Australia and New Zealand in addition to its flights between Guam and Australia, effective October 31 of that year. In 1994, Continental substantially reduced its jet services in Denver and terminated all turboprop operations, which had been unprofitable, reducing Denver from being a hub to a spoke city. Between 1993 and 1995, Continental experimented with an "airline within an airline" by launching
CALite, later renamed
Continental Lite, which provided all-economy, low-fare, no-frills service between primarily leisure destinations. Continental Lite operated with a dedicated fleet of 100
McDonnell Douglas DC-9-30,
Boeing 737-300, and
Boeing 737-500 aircraft, each repainted with the 'Lite' livery and stripped of its first class cabin. The service was based primarily at Continental's existing hub in
Cleveland as well as a new hub established in
Greensboro, North Carolina. The experiment proved unsuccessful and was dissolved in 1995. Continental's short-lived
Greensboro hub was dismantled in the process. During this time period Continental was the subject of hostile takeover bids submitted by Delta Air Lines and
Northwest Airlines. in 1991–2010 livery in August 2009. Former Boeing executive
Gordon Bethune became president and CEO in October 1994 and was elected chairman of the board of directors in 1996. Continental went from being ranked last in most performance categories to winning more J.D. Power and Associates awards for Customer Satisfaction than any other airline.
BusinessWeek magazine named Bethune one of the top 25 Global Managers in 1996 and 1997. Under his leadership Continental's stock price rose from $2 to over $50 per share.
Fortune named Continental among the 100 Best Companies to Work for in America for six consecutive years. In his final year piloting the airline
Fortune magazine ranked Continental 2004's No. 1 Most Admired Global Airline, a title it earned again in 2005, 2006, 2007 and 2008. While at Continental, Bethune created the Go-Forward plan, to fix problems with the airline, which included employee morale, the quality of the product, and the route structure, among others. Bethune began by ordering new aircraft in an effort to convert to an all-Boeing fleet. Beginning in 1998, Continental again embarked on a program to expand its international operations. It inaugurated services to Ireland and Scotland, and in October 1998 the airline received its first
Boeing 777-200ER aircraft, allowing
nonstop flights from Newark and Houston to
Tokyo–Narita, and from Newark to
Tel Aviv, Israel. Continental in the same year launched partnerships with
Northwest Airlines,
Copa Airlines,
Avant Airlines,
Transbrasil, and
Cape Air, and Continental and
America West Airlines became the first two US airlines to launch interline electronic ticketing. In 1999, Continental Airlines started service between Newark and Zurich, Switzerland, and from Cleveland to London.
2000s "
Peter Max" (the colorful aircraft) at
George Bush Intercontinental Airport in
Houston, Texas (December 2006).
Downtown Houston is visible in the background. The livery was removed in the winter of 2007–2008 On March 1, 2001, Continental launched a nonstop service from Newark to
Hong Kong, operating over the North circumpolar route. It was the first nonstop long-haul route for any airline with flying duration exceeding 16 hours. The service initiated a brief dispute between Continental, United Airlines and
Cathay Pacific over rights to nonstop flights between Hong Kong and New York. On September 13, 2004, Continental entered the
SkyTeam alliance along with Northwest/KLM and CSA. In 2005, Continental expanded service from Newark to Beijing after being awarded the China route. Among U.S. airlines, only Delta (with its extensive network of legacy routes dating from Delta's acquisition of Pan American's European network) served more European destinations than Continental. continues to fly this retro livery on a different Boeing 737-900ER, registered N75435 (shown). In October 2005, service to Asia was expanded as Continental introduced daily nonstop service between Newark and
New Delhi, India. The success of this Newark-New Delhi route presaged establishment of a second gateway in India with the announcement of daily nonstop service to
Mumbai. With the establishment of Mumbai service, Continental offered the most nonstop flights by any carrier from the United States to India. By May 2006, the carrier's passenger traffic surpassed that of
Northwest Airlines, and Continental became the fourth-largest U.S. carrier.
The Wall Street Journal reported on December 12, 2007, that Continental was in merger discussions with United Airlines. Of issue would be Continental's
golden share held by Northwest Airlines and the divestiture of Continental's Guamanian hub. A deal was not "certain or imminent", with the talks being of a preliminary nature. In April 2008, at the height of oil prices, Northwest announced a merger with Delta Air Lines. This allowed Continental to buy back the golden share from Northwest Airlines, which it did. Continental then renewed merger talks with United Airlines, but broke them off again that same month. In May 2008, Continental Airlines sold its remaining 4.38 million share investment in Panamanian
flag carrier Copa for $35.75 a share, netting proceeds of $149.8 million. Continental had been a principal shareholder in Copa. In June 2008, due to national and international economic conditions, Continental cut 3,000 jobs and the CEO and president had reduced salaries for the remainder of the year. The airline also reduced capacity and eliminated 67 mainline aircraft from its fleet by the end of 2009, retiring all of Continental's 737-300s and all but 35 of its 737-500s. Continental also announced that it planned to withdraw from SkyTeam and would join
Star Alliance in order to cooperate more extensively with United Airlines and other Star Alliance airlines. The new Continental-United relationship was characterized as a "virtual merger" in some circles. In September 2008, Continental announced that it would commence providing seasonal non-stop service between Houston and
Rio de Janeiro. The new nonstop flight was timed to provide roundtrip flight connections at Continental's Houston hub to more than 160 cities throughout the U.S., Canada, Central America, Europe, and Asia. Continental renewed its lease for around in
Continental Center I. Continental announced that its fourth quarter 2008 net loss widened to $266 million on costs for pilot retirement and reducing the value of its fuel hedges. In January 2009, Continental became the first commercial carrier to successfully demonstrate the use of sustainable biofuel to power an aircraft in North America. During the demonstration flight, Continental's test pilots successfully conducted a number of flight maneuvers, and the biofuel met all performance requirements as compared with traditional jet fuel. The biofuel blend included components derived from algae and
jatropha plants, both sustainable, second-generation sources that do not impact food crops or water resources or contribute to deforestation. In March 2009, Continental became the first U.S. carrier to inaugurate scheduled service between New York and
Shanghai, China, with daily nonstop flights from Newark. in January 2007. In June 2009, Continental Airlines took delivery of another new Boeing 737-900ER, which was painted with a retro livery to commemorate the airline's 75th anniversary. The livery, which was originally used on aircraft beginning in 1947 and is called The Blue Skyway, was selected by Continental employees. Continental flew the aircraft to its three hubs for anniversary celebration events for employees and retirees. Post-merger, United maintained the livery, but on a different 737-900ER than the aircraft originally carrying it. In July 2009 Continental began to offer
DirecTV, giving customers the choice of 95 channels of live television programming, more channels than any other carrier. Continental also launched Virtual Expert technology on their website at continental.com, offering customers 24-hour support on the Web for all their travel needs. Continental was the first airline to use this technology. On January 1, 2010, Jeff Smisek, former president and COO, became the CEO of Continental Airlines. Continental also planned to start seasonal nonstop service between
Portland International Airport (PDX) and
Ted Stevens International Airport (ANC), putting Continental in direct competition with former partner
Alaska Airlines. The route was scheduled to start on June 10, 2010. On February 16, Continental, along with its wholly owned subsidiary
Continental Micronesia, announced that it applied for nonstop flights to
Tokyo-Haneda as part of an open-skies agreement between the US and Japan. Continental planned to begin services to Tokyo-Haneda from its New York/Newark hub in late October 2010, and Continental Micronesia planned to start service to Haneda Airport from its Guam hub. However, Haneda slots were awarded to American, Delta, and Hawaiian Airlines instead. Continental Airlines became the first airline to launch a mobile boarding pass service to London's Heathrow. The service allowed customers to receive boarding passes electronically on their mobile phones or PDAs. Continental Airlines left the
SkyTeam alliance on October 24, 2009, and joined
Star Alliance on October 27, 2009.
Merger with United Airlines (2010) in March 2011. The new
livery after the merger between United and Continental in 2010 retains the Continental brand theme, but with the
Continental replaced by
United. 2011 was the first full year (second year altogether) with the post-merger combination of the two carriers. In February 2008,
United Airlines and Continental Airlines began the advanced stages of merger talks and were expected to announce their decision in the immediate aftermath of a definitive merger agreement between rival
Delta Air Lines and
Northwest Airlines. The timing of the events was notable because Northwest's golden shares in Continental (that gave Northwest veto authority against any merger involving Continental) could be redeemed, freeing Continental to pursue a marriage with United. On April 27, 2008, Continental broke off merger negotiations with United and stated it was going to stand alone. Despite ending merger talks, Continental announced that it would join United in the Star Alliance. United and
US Airways were in advanced merger talks in late April 2008, following the announcement that Continental had broken off talks with United. In June 2008, the CEOs of both United and Continental signed an alliance pact that led to their eventual merger. The alliance was an agreement to link international networks and share technology and passenger perks. This agreement was termed a "virtual merger" as it included many of the benefits of a merger without the actual costs and restructuring involved. The alliance took effect about a year after
Delta Air Lines and
Northwest Airlines completed their merger, as that released Continental from the SkyTeam contract and allowed for the required nine-month notice. Additionally, Continental joined the Star Alliance, as Delta and Northwest merged. United was reported to be in serious merger discussion with US Airways in early April 2010. A
New York Times report indicated that a deal was close. Union consent was cited as a major hurdle for negotiators to clear. On April 22, 2010, United announced that it would not pursue a merger with
US Airways. On May 2, 2010, the boards of directors at Continental and United approved a stock-swap deal that would combine them into the world's largest airline in
revenue passenger miles. The new airline would take on United's name, Continental's globe logo and be based in United's hometown of Chicago. The new United would be run by Continental's CEO,
Jeff Smisek, along with United's CEO, Glenn Tilton, serving as non-executive chairman of the board. The deal received approval from US and European regulators in the summer of 2010. On August 11, 2010, Continental and United revealed a new logo that would be used. The shareholders of both airlines approved the deal on September 17, 2010. Both airlines had been reporting losses in the recession and expected the merger to generate savings of more than a year. On October 1, 2010, UAL Corporation and Continental Airlines completed the planned merger and changed the name to United Continental Holdings. Although the two airlines remained separate until the operational integration was completed by early-2012, as of that day both airlines were corporately controlled by the same leadership. On December 22, 2010, Continental Airlines merged operating certificates with Continental Micronesia. All Continental Micronesia flights were then branded and operated by Continental Airlines. Both carriers began merging their operations in 2011. On March 22, 2011, UCH announced that they had plans to offer Wi-Fi Service on more than 200 domestic Boeing 737 and 757 aircraft. The airlines attained a single operating certificate from the FAA on November 30, 2011 as the carriers no longer operates as a separate airline. That day, all Continental flights began to use the "United" callsign in air traffic control communications which marked the end of Continental Airlines. Both carriers planned to begin merging operations in 2011 and were expected to receive a single operating certificate by 2012. Continental's
air operator's certificate (AOC) was retained, while those of United and Continental Micronesia were surrendered. On the other hand, United's maintenance certificate remained while Continental's did not. On June 27, 2019, United changed its parent company name from United Continental Holdings to
United Airlines Holdings. The Newark hub began the rebranding process on October 19, 2011, with all United-operated ticket counters and gates rebranded in Phase One; Phase Two of rebranding at Newark began in early-2012 with Continental ticket counters and gates being rebranded. On March 3, 2012, Continental's passenger reservation system and frequent flyer program was merged into United. The last Continental Airlines flight taking off was "Continental Flight 1267", flying from Phoenix to Cleveland, and arriving into the latter as "United Flight 1267". United Airlines, Inc. merged into Continental Airlines, Inc., with Continental Airlines, Inc. being the surviving corporate entity and a wholly owned subsidiary of the UAL Corporation, on March 31, 2013. The name of Continental Airlines, Inc., was changed to United Airlines, Inc. ==Corporate identity==