As the 20th century drew to a close, United redefined itself. Now operating in a deregulated environment, the company inaugurated service to Europe and South America and expanded its number of Pacific Rim destinations. United also adopted a new livery and logo befitting a global airline. Most important, United established its Employee Stock Ownership Plan, creating the world's largest majority employee-owned company in the world.
New Image for a New Airline...
As United entered the last decade of the 20th century, it took on an exciting, new image -- a growing, global airline. On Jan. 5, 1990, the company received U.S. government approval to serve Paris from Chicago and Washington, D.C., and, soon after, launched Newark-Tokyo service. By year's end, a series of bold moves left no question about United's plans for unparalleled expansion.
In just nine days in October 1990, the company placed the largest aircraft order in commercial aviation history -- $22 billion dollars -- and announced its purchase of Pan American's U.S. routes to London. At the same time, the U.S. government approved United's long-standing application to serve Tokyo from Chicago and granted an exemption to permit service to Madrid from Washington Dulles.
By the end of 1991, United was serving Amsterdam, Berlin, Madrid and Munich. In 1992, Caracas, Buenos Aires, Rio de Janeiro, Sao Paolo and other South American cities became United destinations. Stephen Wolf that year relinquished the airline presidency, remaining as chairman and CEO. Executive Vice President John Pope became president and chief operating officer.
The picture started to change in 1991 as fuel prices rose to record highs in the aftermath of the Persian Gulf crisis and a number of low-cost, no-frills carriers came on the competitive scene. UAL Corporation reported a record net loss of $332 million in 1991 and set a new, more dismal record in 1992: a net loss of $957 million.
United began 1993 by introducing a new gray, navy and red livery for its aircraft and new employee uniforms to project a more global image. But in response to the company's poor financial performance, senior management quickly switched gears to a strategy of stringent cost containment. A hiring freeze, the grounding of older aircraft and the sale of 15 of United's flight kitchens contributed to a $400 million reduction in operating expenses that year, but it was not enough.
The company proposed a significant change in labor costs and began months of intense negotiations with employee unions. The negotiations produced agreements in mid-December with the Air Line Pilots Association and the International Association of Machinists. On Dec. 22, 1993, the UAL board approved a proposal for 54,000 employees to exchange portions of their salaries and benefits for UAL stock, paving the way for the creation on July 12, 1994, of the largest majority employee-owned company in the world.
