UAL Pulls Plug On Avolar, Recalls Employees

Less than a year after launching its corporate jet operation Avolar, UAL Corp., parent of United Airlines, late last week closed the wholly owned subsidiary. In making the announcement, UAL CEO Jack Creighton said, "At this juncture, we believe closing the subsidiary is the most prudent move possible--one that protects United Airlines from further financial exposure, supports United's efforts to pursue its financial stability and recovery, and enables United to focus on its core competencies."

Critics cited those reasons throughout Avolar's development, suggesting financially strapped United should not have bought hundreds of new corporate jets for a venture that could have cannibalized its high-yield traffic. Although Avolar officials earlier this spring indicated some clients were signed onto its fractional ownership program and many more were in the pipeline, travel management company representatives, consultants and travel buyers contacted by BTN said only interest--and not action--was evident in the economically depressed marketplace.

United said it will begin an "orderly shutdown" of Avolar, the boldest corporate jet initiative yet launched by a major commercial carrier. Meanwhile, Delta Air Lines' DeltaAirElite, which focuses more on corporate aircraft management and traditional charters, continues to grow modestly. Atlantic Coast Airlines, based at Washington Dulles Airport, last month began a private jet operation for a corporate client and said others were under discussion.

Instead of focusing on private jets, United instead continues to piece back its network, and late last week also announced it was recalling another 1,300 employees laid off last fall and hiring 900 new ones in key markets.