Continental Airlines: Encyclopedia II - Continental Airlines - History

Continental Airlines - History

Continental Airlines - Early history

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 on 1 July 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 1957 it flew for the first time from Chicago to Los Angeles. Although the airline took deliveries of its first jet aircraft in 1958, its Boeing 707s did not fly to the East Coast.

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. 1969 saw service to Honolulu begin, and in 1970, Continental's first Boeing 747 arrived. DC-10s were added to the fleet soon after, and the rest of the 1970s saw Continental's trans-Pacific expansion continue, landing in Auckland and Sydney by 1977.

Continental Airlines - First bankruptcy

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 based in Houston in 1982 where the headquarters subsequently moved. The merger gave Continental its current hub at George Bush Intercontinental Airport and its 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.

In 1985, Continental made its first rebound by starting flights from Newark and Houston to London. The company emerged from bankruptcy in 1986. Just one year later, Lorenzo decided to purchase People Express and its hub at Newark, making Continental the third-largest airline in the U.S. 1987 saw the creation of the OnePass frequent flyer program, and in 1988 Continental made its first partnership ever, with SAS.

Continental Airlines - Second bankruptcy

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 fuel 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. Under the leadership of Gordon Bethune, Continental subsequently ordered new Boeing aircraft - converting to an all-Boeing fleet - and scaled down their expensive Denver hub until it was closed entirely in 1995. Bethune chronicled his experiences in the book From Worst to First.

Continental went on to expand its international operations. In 1998, it launched flights to Ireland and Scotland, and in October of 1998 the airline received its first Boeing 777, allowing non stop flights from Newark and Houston to Narita, Japan. Continental also launched partnerships with Northwest Airlines, Copa, Avant Airlines, Transbrasil, and Cape Air, and Continental and America West Airlines became the first two US airlines to launch interline electronic ticketing. In 2002, Continental announced that it would open a hub at Luis Muñoz Marín International Airport in San Juan, Puerto Rico to compete with American Airlines.

On March 1, 2001, Continental had a breakthrough by launching a non-stop flight from Newark to Hong Kong, flying over the North Pole, which was the first non-stop long-haul flight service for any airline with flying duration of 16 hours. However, the September 11 attacks caused service to be suspended until August 1, 2003. The launch in 2001 started the battle between Continental, United Airlines and Cathay Pacific over non-stop flights between Hong Kong and New York.

On February 22, 2005, the United States Department of Transportation announced that both Continental and American had won a battle with Delta Air Lines to operate flights to China, with Continental offering a daily flight from Newark to Beijing beginning June 15, 2005. With the announcement, both Continental and American, along with United, will become the only three United States based airlines to offer non-stop flights between the United States and Mainland China. (Northwest Airlines operated non-stop flights to Beijing from Detroit from 1996 to 2002). Continental also flies non-stop from Newark to New Delhi and plans to start service from Newark to Shanghai in 2007.

Adapted from the Wikipedia article "History", under the G.N U Free Docmentation License. Please also see http://en.wikipedia.org/wiki