United Airlines
p. 29 · Read in the full issue
OK to fly
The largest airline acquisition in history, the US$7l5 million purchase by United Airlines of Pan American’s Pacific routes, cleared its last major hurdle in November and, on January 1, 1986, had only one week to go for final clearance.
The deal was opposed by the U.S.Justice Department and Northwest Orient Airlines on grounds that it would hurt com petition. However, the US Transportation secretary, Eliza beth Hanford Dole, said Amer ican air carriers in the Pacific were being increasingly squeezed by Asian companies, principally Japan Air Lines, which is the largest carrier in the Pacific. The US needed the muscle which would come from an expanded United Airlines, she said.
All that is now left is a statutory approval by President Reagan who, on November 8, 1985, had 60 days to review Dole’s ruling. He could veto the deal only on grounds that it could threaten national security or impede foreign policy and that is not expected. Indeed, given America’s current efforts to compete with Japan in most trading areas, and the com plaints of American business men about Japanese competi tion and the adverse balance of trade, a presidential knock-back would be bad domestic politics.
Pan American was a pioneer on the routes from Los Angeles to Sydney and Auckland for many years (though no longer, since the advent of the long range Boeing 747 SP aircraft), using Nadi as a stopover and refuelling point. They still run into Sydney, Melbourne and Auckland, offering a stop at Honolulu on some services, and a non-stop trip to Los Angeles on others, using the high-flying (50,000 feet plus) SP model.
But the cream of the network bought by United is in the northern Pacific routes linking Tokyo with American ports like New York, Houston, New Orleans, Los Angeles and San Francisco. From Tokyo the net
work extends to Seoul, Taipei, Hongkong, Bangkok, Singa pore and Manila and also bran ches into Peking, and Shang hai. Given the development and further potential of the Western Pacific countries, these links are valuable indeed.
While no statements have been made about United’s in tentions in the southern Pacific, board chairman Richard Ferris said in Washington recently that ’’United is ready to begin service on the new routes as soon as possible.”
With success virtually assured, United announced an order of up to 116 new airliners from the Boeing Aircraft Com pany of Seattle, involving ex penditure of more than US$3 billion, the largest deal yet done in the history of civil aviation.
The airline’s president, James J.Hartigan, said this new inven tory, made up of six 747 jumbo jets, and 110 737 twin-jets, would take United comfortably into the 19905.
The arrival of United on the Pacific scene could have a significant spin-off for island tourism. United is the largest of the US domestic carriers and, unlike Pan Am before it, is able to feed passengers into its new routes from its extensive services in all 50 of the Amer ican states, plus Canada, Mex ico and the Bahamas. One of Pan Am’s problems was the US Federal Aviation Administration rule which restricted its services within the United States. United does not have that problem and can thus feed passengers into the US West Coast gateways to the Pacific Portland and Seattle, San Francisco and Los Angeles.
United flies 1475 flights a day, and the Pan Am acquisi tion will take that up by 35.
Whether United will resume stopovers in Fiji is not yet known. Industry observers ex pect them not to take up that option, at least in the near future, thereby leaving that part of the field to Continental Air lines. Air Pacific was recently granted landing rights in Los Angeles.