Continental Air Lines, Inc.

Product Details

Historical Context

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Continental Airlines began service in 1934 as Varney Speed Lines, named after its initial owner, Walter T. Varney, first operating out of El Paso International Airport. Varney Speed Lines changed its name to Continental in 1937 after new owner Robert Six had taken over. Six moved the airline headquarters to Stapleton Airport in Denver, Colorado in October of that same year. He went on to preside over the airline for 40 years.

In the 1940s Continental's Denver headquarters became a conversion center where the airline took care of converting B-27s and B-29s for the United States military during World War II.

The airline's route network was limited to the southwestern United States for many years. In 1953, Continental merged with Pioneer Airlines, gaining access to 16 more cities in Texas and New Mexico.

In 1963 the company's headquarters moved to Los Angeles and in 1968 a new livery was launched, the orange and gold cheatlines adorned with a black global circle on the jet's tails. Later in the 1960s, the airline transported American soldiers to Vietnam, and realizing there was a market in the Pacific Ocean, Continental set up an airline in Micronesia, Air Micronesia. This airline is nowadays known as Continental Micronesia and uses Continental's livery on its jets.

In 1978, the Airline Deregulation Act was passed by Congress, creating problems throughout the airline industry that spurred many airline mergers. After considering a merger with Western Airlines, Continental merged with Texas International in 1982. The merger gave Continental its current headquarters at Houston Intercontinental Airport and routes to Mexico; it also gave Continental a new CEO, former Texas International chief Frank Lorenzo. In 1983, Continental filed to reorganize under Chapter 11 of the Federal Bankruptcy Code: much of the airline was liquidated and the company was rebranded as a low-cost carrier. Continental was also forced to abandon its hub in Los Angeles, although it maintained its South Pacific routes.

The company emerged from bankruptcy in 1986. Just one year later, Lorenzo decided to purchase People Express and its hub at Newark International Airport, making Continental the third-largest airline in the U.S.

Continental filed for bankruptcy again in 1991, shortly after unveiling a new white and blue livery. There were a number of circumstances behind the second bankruptcy: Lorenzo left Continental to dedicate himself full time to Eastern Airlines, and gas prices had risen because of Iraq's invasion of Kuwait and the resulting Gulf War. People Express had also been highly leveraged at the time of its merger with Continental, having purchased Frontier Airlines just two years before. In 1993, Air Canada, along with Air Partners and Texas Pacific Group, aided Continental in coming out of chapter 11 once again by investing $450 million dollars in the airline.

On February 22, 2005, the United States Department of Transportation announced that both Continental and Delta to operate flights to China, with Continental offering a daily flight from Newark International Airport to Beijing. With the announcement, both Continental and American became the first two United States based airlines to offer non-stop flights between the United States and China in history.

On May 2, 2010, the Board of Directors at Continental and United Airlines approved a stock-swap deal that would combine them into the world's largest airline. The airlines publicly announced the deal the next day. The new airline would eventually take on the United Airlines name and be based in United's hometown of Chicago. The merger re-united the two airlines originally founded by Walter Varney, whose offspring includes Continental and United. The combined carrier took the United Airlines name but used Continental's logo and livery. 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 Cleveland as "United Flight 1267".

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