Some of us can remember a time when any number of US airlines graced the skies, both near and far. Most dated back to the early days of commercial aviation and every single one of them had a loyal fan base. Several were permanently grounded as a result of severe financial difficulties that no amount of bankruptcy restructuring could fix. Others were absorbed in complicated mergers that left only one carrier as the surviving airline. Whatever the reason, all of them are missed. That’s why I thought it’d be fun to take a look back at these bygone airlines; how they started, how they grew and what contributions they made to the world of aviation. This is the second installment in a multi-part series. If you’re lucky enough to remember flying just one of these carriers, I hope you enjoy your trip down memory lane. If not, I'm betting you'll appreciate learning more about what made each airline special and the role they played in the evolution of the industry. Next up - Continental Airlines.
Walter Thomas Varney served as a pilot in the Aviation Section of the US Signal Corps during the First World War. Following the conflict, he established an aviation school and air taxi service in northern California. In October 1925, he was awarded one of the first contacts under the recently passed Contract Air Mail Act and based his operation, Varney Air Service, in Pasco, Washington. He sold that company (which later became United Airlines) in 1930 and formed Varney Speed Lines in 1934. His new company provided both airmail and passenger service (as a sideline) from Texas to Colorado. The airline started out with the Lockheed Vega, a single-engine plane that carried 4 passengers. In 1936 Varney’s partner Louis Meuller gained control of the company and sold a 40 per cent interest to Robert F. Six for $90,000 (about $1.7 million in today’s dollars). As General Manager, Six changed the name a year later to Continental Air Lines. It best reflected his dream to have the carrier fly in all directions throughout the US.
During World War II, Continental’s Denver maintenance base converted Boeing B-17 Flying Fortresses, B-29 Super Fortresses and North American P-51 Mustangs for the US Army Air Corps. Profits from military transportation and aircraft conversion enabled Continental to think about expansion and acquisition of new airliners after the war. This facilitated their route system expansion throughout the southwest and eastward across Kansas. In 1955, Continental merged with Pioneer Air Lines and gained access to 16 additional cities across Texas and New Mexico. Harding Luther Lawrence arrived at Continental as a result of that merger. Six commented on more than one occasion, “One of the biggest reasons we merged with Pioneer was to get Harding,” Several innovative changes were introduced at Continental during Harding’s 10 years as the airline’s Executive Vice President. With him at the helm, Continental also grew by 500 per cent! At the dawn of the Jet Age, Chicago-Los Angeles nonstop service was introduced with their first B707s. First Class service on these "Golden Jets" was described as “Nothing short of luxurious” by the Los Angeles Times, and “Clearly, the finest in the airline industry” by the Chicago Tribune.
During the Vietnam War, the airline provided extensive cargo and troop transportation for US Army and Marine Corps forces to bases in Asia and the Pacific Basin using long-range B707s. With this experience, Continental formed Air Micronesia in 1968, inaugurating island-hopping routes on aircraft equipped with open-ocean survival gear, doppler radar and a large complement of spare parts (including tires). A senior mechanic also flew on every flight. At the end of the decade, the carrier launched flights from Los Angeles to Honolulu. At Robert Six’s insistence, Continental (along with PanAm and TWA) became one of the 3 launch customers for the B747. In June of 1970, the carrier put the “jumbo” into domestic service. Its upper-deck First Class Lounge and main deck “Polynesian Pub” won awards worldwide for the most refined cabin interior among all airlines, as did Continental’s meal service developed by their Cordon Blue-trained executive chef Lucien DeKeyser. The airlines’s 747 flights from Chicago and Denver to Los Angeles and Honolulu set the standard for service in the Western US. In 1976, they began flying to Australia and Air Micronesia started a daily roundtrip between Saipan and Japan. Unfortunately, the Airline Deregulation Act of 1978 rocked Continental’s world and soon laid bare the stark reality between revenues and expenditures. For the first time, consumers were able to choose lower fares over better service and this didn't bode well for Continental.
Texas International, an airline controlled by aviation entrepreneur Frank Lorenzo, acquired the carrier in 1981 after a contentious battle with management. The better-known Continental name and identity was retained and the new company offered service with a fleet of 112 aircraft. Lorenzo became Chairman and CEO in 1982 and just one year later the company moved its headquarters from Los Angeles to Texas International’s base in Houston. The relocation resulted in a large expansion of its hub in that Texas city and extensive new routes into Mexico and South America soon followed. Unfortunately, dwindling profits and labor strife continued to plague the carrier. The constant battles and the airline’s already weak financial position led to Continental filing for Chapter 11 bankruptcy protection in 1983. The company began to reorganize and created new contracts for pilots and labor union workers. However, during this period, employee morale and loyalty hit a new low as Continental was often cited for poor customer service and unreliability. The company began service from Houston to London in 1985 and exited from bankruptcy protection the following year with a stronger route network and more competitive hubs. Continental bought a low-cost carrier based in Newark called People Express in1987, gaining prized routes to London and Paris. The acquisition also provided the foundation upon which to build a formidable hub in the strategic New York market. That same year, they adopted a new livery highlighted by the now well-known “globe” logo. The airline’s future began to look brighter...but not for long.
The Iraqi-led invasion of Kuwait in 1990 led to a dramatic increase in the price of jet fuel. Continental filed for bankruptcy protection yet again in December of that year, emerging in April of 1993. Former Boeing executive Gordon Bethune joined the airline in 1994 as Chief Operating Officer and was named President and CEO of the airline shortly thereafter. He was determined to turn things around and was wildly successful. Continental went from being ranked last in most performance categories to winning more JD Powers and Associates Awards for Customer Satisfaction than any other airline. Business Week named Bethune one of the top 25 Global Managers in 1996 and 1997. Under his leadership, the airline’s stock price rose from $2 to over $50 per share. Fortune named Continental among the Best 100 Companies to Work for in America for 6 consecutive years. In 2004, Fortune also ranked the carrier the “No. 1 Most Admired Global Airline,” a title it claimed again for the next 4 years! Beginning in 1998, Continental again embarked on a program to expand its international operations, inaugurating service to Ireland and Scotland. After receiving its first B777-200ER aircraft, they added nonstop flights from Newark and Houston to Tokyo and Tel Aviv and later to Zurich.
Continental launched a nonstop service from Newark to Hong Kong in early March of 2001 operating over the North Pole, Russia and China. It was the first, nonstop, long-haul flight for any airline with a flying time of more than 16 hours! Several years later, they expanded service from Newark to Beijing. In 2005, flights to Asia increased yet again as the carrier introduced daily, nonstop service between Newark and New Delhi, India. The success of that route led to their establishing another daily nonstop to India from Newark - this time to Mumbai. By mid-2006, Continental’s passenger traffic surpassed that of Northwest Airlines and they became the 4th largest US carrier. Just 2 years later, the airline announced that it would begin providing seasonal, nonstop service between Houston and Rio de Janeiro. The new flight was timed to provide roundtrip flight connections at Continental’s Houston hub to more than 160 cities throughout the US, Canada, Central America, Europe and Asia. But everything changed with the 2008 recession. As oil prices again jumped off the charts, airlines needed to retrench and the only way forward was to join forces. Northwest was first. It announced a merger with Delta Airlines that set off a chain reaction. The US airline industry would never be the same.
After a flurry of “on-again, off-again“ merger discussions between Continental and United Airlines, the Boards of Directors announced a stock-swap deal in May, 2010. It proposed combining both carriers into what would become the world’s largest airline in terms of revenue passenger miles. The new airline would retain the United name as well as the Continental “globe” logo but be based in United’s hometown of Chicago. The deal received approval from US and European regulators in the summer of 2010 and shareholders approved the agreement in September. The merger was completed the following month. The new airline obtained its single operating certificate from the US Federal Aviation Administration on November 30, 2011. On that day, all Continental flights began using the “United” callsign in air traffic control communications. It marked the end of Continental Airlines and its 77-year aviation history.
Until next time…stay safe.