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UAL originated in the air mail service of Walter Varney, founded in 1926 in Boise, Idaho. Varney Airlines' original hangar served as a portion of the terminal building for the Boise Municipal Airport until 2003, when the structure was replaced.
In only four years the company included a number of airlines, aero manufacturing companies and several airports and was also closely associated with the new firm of William Boeing. Following the Air Mail Scandal of 1930, by 1934 the company still held its airlines routes but had lost all its non-airline holdings and had a new president in William A. Patterson (who remained in that office until 1963).
United's early routes operated in and around the West Coast, Midwest, and Mid-Atlantic states. It operated transcontinental flights through Denver, Colorado, which remains a major United hub to this day.
During World War II United was involved in the training of ground crews and material transportation. Post-war United benefited from the boom in demand for air travel.
On November 1, 1955, United Airlines Flight 629, which was flying from Stapleton Airport in Denver to Portland, Oregon was bombed, killing everyone on board. The bomb was planted by a man named Jack Graham, who was executed a year after the explosion [1].
United was an early customer of the Douglas DC-8, which was released months after the Boeing 707 and caused the airline to enter the jet age late. The company merged with Capital Airlines on June 1, 1961, making it the world's largest commercial airline and giving it a route network covering the entire United States.
In 1968 the company reorganized, creating UAL, Inc., with United as a wholly owned subsidiary. United also began to seek overseas routes in the 1960s, but the Transpacific Route Case ( 1969) denied them this expansion and it did not gain an overseas route until 1983, when they began flights to Tokyo. By the end of the year, United had flights to 13 Pacific destinations, many of which were with route contracts purchased from the ailing Pan Am.
Economic turmoil, labor unrest, and the pressures of the 1978 Airline Deregulation Act greatly affected the company, which incurred losses and saw a greatly increased turnover in its senior management through the 1970s and early 1980s.
In May 1981 United launched its Mileage Plus frequent flyer program one week after archrival American Airlines launched the first.
Between 1982 and 1987, United attempted to diversify its business, to stabilize its finances and reduce the power of its unions. It acquired the Westin and Hilton Hotel chains and the Hertz car rental company, and briefly changed its name to Allegis. The venture failed, however; Allegis divested its non-airline properties in 1987 and reverted to the name UAL Corp.
The fall of Pan Am offered new opportunities for United. In 1990 the company initially expanded aggresively, purchasing Pan Am's rights at London Heathrow Airport and paving the way for the company's first trans-Atlantic flights. However, the aftermath of the Gulf War and increased competition led to losses of $332m in 1991 and $957m in 1992.
In 1994, 55% of company stock was given to employees in exchange for salary concessions from its unions. The ESOP (Employee Stock Ownership Plan) made United the largest employee-owned company in the world. It used the opportunity to create a low-cost subsidiary, Shuttle by United, in an attempt to compete with low-cost carriers.
In 1997 it joined the Star Alliance with Air Canada, Lufthansa, SAS and Thai Airways.
United was a launch customer of the Boeing 777, and was the first to introduce the twin-jet in commercial service.
In May 2000, United announced plans to acquire competitor US Airways in a complex deal valued at $11.6 billion. The offer drew immediate scorn from consumer groups and employees of both airlines, however. By the following year regulatory sentiment was against the deal, and the Department of Justice barred the merger on antitrust grounds in July.
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