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Topic: UA To Start A New/Separate Company!
Username: Wolfy
Posted 2001-04-26 23:58:51 and read 1418 times.

United Airlines parent UAL Corp. plans to launch a separate company this year that will offer fractional shares in business jets, corporate shuttle, charter and aircraft management services.

United has committed $250 million to the program's launch and is recruiting management personnel for the new venture. The carrier expects to formally launch the operation this summer and has set up an office in suburban Chicago that Stuart Oran, currently senior VP-international, will run.

The fractional ownership program will be the centerpiece of the new operation, which will include a fleet of some 200 corporate aircraft in five years. UAL is looking at a variety of aircraft with seating for up to 14 passengers and already has a memorandum of understanding with one manufacturer, sources said.

United retained consultant Booz-Allen & Hamilton 20 months ago to begin researching the new venture. More recently, United retained Landor Associates to help with branding.

The company has received the blessing of the Air Line Pilots Association, which represents its pilots, to move forward.

United enters the fractional ownership fray - which primarily courts business travelers - at a time when the airline's own business traveler numbers have declined.

It also is facing scrutiny from Wall Street over larger issues. United posted a loss of more than $300 million in the first quarter and warned of a potential full-year loss if the economy doesn't improve and if business travel doesn't pick up. At the same time, United's proposed merger with US Airways has come under regulatory scrutiny.

The fractional ownership business, however, has been booming, with many providers saying that the market potential is virtually unlimited. The number of fractional customers has grown from fewer than 100 in 1992 to more than 2,300 last quarter, and the fractional aircraft fleet has grown proportionately, approaching 600 aircraft, according to Aviation Data Service in Wichita, Kan.

Jim Coyne, president of the National Air Transportation Association, which represents fractional ownership providers, called United's plans "very, very intriguing."

The move is further proof that business aviation is the fastest growing segment of aviation, Coyne said.

"This ratifies the health and future prospects for the industry," he said.

United officials were impressed by the Berkshire Hathaway model for a fractional operation, sources said, noting only a handful of companies provide the full spectrum of business aviation operations.

Berkshire Hathaway bought fractional ownership pioneer Executive Jet in August 1998 for $725 million.

Executive Jet remains the largest fractional ownership provider, with some 340 aircraft in its fleet, and has ordered more than 800 aircraft in the past five years.

By contrast, United Airlines, the world's largest carrier, was operating a fleet of 606 aircraft as of March 31.

Other major fractional providers include Bombardier's Dallas-based FlexJet, Flight Options of Cleveland, and Raytheon Travel Air, headquartered in Wichita, Kan.

Topic: RE: UA To Start A New/Separate Company!
Username: Flyf15
Posted 2001-04-27 01:25:50 and read 1357 times.

What I'm not clear on is what type of operation it will be. Are we going to be seeing these planes painted in United colors, pulling up to gates?

Topic: RE: UA To Start A New/Separate Company!
Username: Tsully
Posted 2001-04-27 01:33:12 and read 1349 times.

I hope these biz jets will be available to NRSA's  Smile.
But I doubt it... they will probably be used on a charter basis.

Topic: RE: UA To Start A New/Separate Company!
Username: Aloha 737-200
Posted 2001-04-27 01:36:50 and read 1347 times.

Wow, United gets bigger. I hope their service is better! Big grin

No offense UAL fans...

Aloha 737-200

Topic: UAL
Username: Wolfy
Posted 2001-04-27 03:13:47 and read 1331 times.

I guess they will be painted in UAL's color and logos, but wonder if they'll still offer mileages?  Smile


Regards,

Wolfy

Topic: RE: UA To Start A New/Separate Company!
Username: ContinentalEWR
Posted 2001-04-27 04:22:41 and read 1299 times.

Hmmmm.....overpaid pilots, a merger that is likely to be nixed by the regulators, a huge first quarter loss, climbing operating costs....and now an aircraft leasing
company launched just as corporations tighten their travel budgets.....Boy, United sure is Rising!

Whatever. United should fix its core problems first. It needs to address its operating costs, fix lingering service problems from last year, and return to profitability and by all means dump US Airways as a
merger partner.

ContinentalEWR


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