]UAL pulls plug on business jet unit Avolar

Gordon Werner · 03-22-2002, 07:46 PM

Friday March 22, 6:31 pm Eastern Time

UAL pulls plug on business jet unit Avolar

CHICAGO, March 22 (Reuters) - UAL Corp., parent of United Airlines, said on Friday it will shut its business jet unit, Avolar, after finding no viable options for the company in an industry hurt by the Sept. 11 attacks and the weak economy.

UAL said earlier in March it had stopped seeking outside investors for Avolar, which offered part ownership in corporate jets, and planned no further investment of its own.

The No. 2 U.S. carrier formed Avolar in May 2001 to tap corporate America's appetite for business jet travel, but UAL posted an industry record net loss of $2.1 billion last year following the attacks and the weak economy.

UAL decided to look for outside investors for the start-up following the attacks, but a months-long search was called off in early March and Avolar President Stuart Oran stepped down.

In a short statement, UAL Chief Executive Jack Creighton said closing Avolar was ``the most prudent move possible.''

Creighton, who took over as chief executive in October, said closing the unit would protect United from further financial exposure and help it focus on core business.

"The real message here is that you have new management at United," industry consultant Michael Boyd said. "This shows that they are refocusing on the airline industry, on their core business."

UAL said it has started to notify Avolar customers of the closing and anticipates an orderly shutdown. There is no timetable for closing Avolar, which has 83 employees.

UAL had invested $102 million in Avolar through January, according to regulatory filings with the U.S. Securities and Exchange Commission. It could face a significant write-off if the new strategy fails, UAL said in the March filing.

"I think this is a very postive thing,'' Boyd said. "It says United Airlines is turning around; actually, it's as good as turned around when you have that kind of management there. It took guts for him to do this because they've got a lot of money tied up in Avolar.''

Avolar offered shares in Beechjets made by Raytheon Co., Learjets by Bombardier Inc., Gulfstreams by General Dynamics Corp. and Falcons by Dassault Aviation.

Bill G · 03-22-2002, 09:05 PM

This is probably the second smartest move United has made in recent months. Topping the list of course is forcing Goodwin out of the picture. United is a great airline and will bounce back.

Bill G

NEADC9 · 03-22-2002, 09:49 PM

I hope they do (bounce back). It is the only airline I fly on. Or at least try to fly on. Headed to PIT the beginning of this week on UA Express CRJ and J-41 through IAD. I originate out of PVD. I love both the CRJ (with the exception of the neck strain) and J-41 (no neck strain there with thosebig windows!)

Go United!

Scott · 03-22-2002, 11:55 PM

Hi Bill, thanks for your kind thoughts. The only way to survive the post 9-11 era is to concentrate on the core business. I hope Siegel will achive great strides for USAirways, particularly if the wolfman joins his puppet goodwin in the Shangri-La of retirement.
You've all been through the ringer and deserve a change for the better!

Bill G · 03-23-2002, 12:27 AM

Thanks Scott. I'm keeping my fingers crossed that Siegel will show some leadership and has a workable plan for the future of US Airways. Hopefully we can see some growth eventually instead of shrinking as we have been doing over the past 10 years or so.
I do have a friend who is in upper management at Southwest who says he can get me in a training class, all I have to do is say when. This is a definite plan B, but the last thing I want to do is start all over again. (Been there, done that. Thank you Carl Ichan) It would be a 75% paycut.
If US Airways does sink, I'll jump on the chance, but until then I gotta hope for the best.

Bill G

Travelin' Man · 03-23-2002, 01:39 AM

A step in the right direction. Avolar was nothing but a stupid business venture that wasted a ton of money that could have helped UAL at a time when they needed it.

Tony Sepanski · 03-25-2002, 12:01 PM

I find it fascinating that UAL determined there to be no viable future for this venture when organizations like NetJet and other 'time-share' bizjet companies has seen new customers and revenue skyrocket since 9/11.

It's also quite ironic to read the glowing article about Avolar in this months issue of Airways and then see this announcement...

Good to hear from you BillG -- I haven't seen you post around and about DAC for a while. Hope all is well for you...

03-22-2002, 07:46 PM	#1
Gordon Werner Insane Collector Join Date: Jun 1998 Location: Somewhere else Age: 37 Posts: 2,059	UAL pulls plug on business jet unit Avolar Friday March 22, 6:31 pm Eastern Time UAL pulls plug on business jet unit Avolar CHICAGO, March 22 (Reuters) - UAL Corp., parent of United Airlines, said on Friday it will shut its business jet unit, Avolar, after finding no viable options for the company in an industry hurt by the Sept. 11 attacks and the weak economy. UAL said earlier in March it had stopped seeking outside investors for Avolar, which offered part ownership in corporate jets, and planned no further investment of its own. The No. 2 U.S. carrier formed Avolar in May 2001 to tap corporate America's appetite for business jet travel, but UAL posted an industry record net loss of $2.1 billion last year following the attacks and the weak economy. UAL decided to look for outside investors for the start-up following the attacks, but a months-long search was called off in early March and Avolar President Stuart Oran stepped down. In a short statement, UAL Chief Executive Jack Creighton said closing Avolar was ``the most prudent move possible.'' Creighton, who took over as chief executive in October, said closing the unit would protect United from further financial exposure and help it focus on core business. "The real message here is that you have new management at United," industry consultant Michael Boyd said. "This shows that they are refocusing on the airline industry, on their core business." UAL said it has started to notify Avolar customers of the closing and anticipates an orderly shutdown. There is no timetable for closing Avolar, which has 83 employees. UAL had invested $102 million in Avolar through January, according to regulatory filings with the U.S. Securities and Exchange Commission. It could face a significant write-off if the new strategy fails, UAL said in the March filing. "I think this is a very postive thing,'' Boyd said. "It says United Airlines is turning around; actually, it's as good as turned around when you have that kind of management there. It took guts for him to do this because they've got a lot of money tied up in Avolar.'' Avolar offered shares in Beechjets made by Raytheon Co., Learjets by Bombardier Inc., Gulfstreams by General Dynamics Corp. and Falcons by Dassault Aviation.

03-22-2002, 09:05 PM	#2
Bill G Insane Collector Join Date: Aug 2000 Location: Springfield, MO Posts: 1,227	Avolar This is probably the second smartest move United has made in recent months. Topping the list of course is forcing Goodwin out of the picture. United is a great airline and will bounce back. Bill G __________________ *Ozark Flies Your Way* FEES DON'T FLY AT SOUTHWEST

03-22-2002, 11:55 PM	#4
Scott Insane Collector Join Date: Mar 2000 Location: Escondido, Ca. USA Age: 50 Posts: 2,763	Hi Bill, thanks for your kind thoughts. The only way to survive the post 9-11 era is to concentrate on the core business. I hope Siegel will achive great strides for USAirways, particularly if the wolfman joins his puppet goodwin in the Shangri-La of retirement. You've all been through the ringer and deserve a change for the better! __________________ Fly the Friendly Skies of United uniTED takes wing Feb 12, 2004

03-23-2002, 12:27 AM	#5
Bill G Insane Collector Join Date: Aug 2000 Location: Springfield, MO Posts: 1,227	Thanks Scott. I'm keeping my fingers crossed that Siegel will show some leadership and has a workable plan for the future of US Airways. Hopefully we can see some growth eventually instead of shrinking as we have been doing over the past 10 years or so. I do have a friend who is in upper management at Southwest who says he can get me in a training class, all I have to do is say when. This is a definite plan B, but the last thing I want to do is start all over again. (Been there, done that. Thank you Carl Ichan) It would be a 75% paycut. If US Airways does sink, I'll jump on the chance, but until then I gotta hope for the best. Bill G __________________ *Ozark Flies Your Way* FEES DON'T FLY AT SOUTHWEST

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03-22-2002, 09:49 PM	#3
NEADC9 Insane Collector Join Date: Aug 2001 Location: Franklin, MA Posts: 981	I hope they do (bounce back). It is the only airline I fly on. Or at least try to fly on. Headed to PIT the beginning of this week on UA Express CRJ and J-41 through IAD. I originate out of PVD. I love both the CRJ (with the exception of the neck strain) and J-41 (no neck strain there with thosebig windows!) Go United!

03-23-2002, 01:39 AM	#6
Travelin' Man Insane Collector Join Date: May 2000 Location: Aspen USA!!! Posts: 1,919	A step in the right direction. Avolar was nothing but a stupid business venture that wasted a ton of money that could have helped UAL at a time when they needed it.

03-25-2002, 12:01 PM	#7
Tony Sepanski Master Collector Join Date: May 2000 Location: Seattle, WA, USA Posts: 798	I find it fascinating that UAL determined there to be no viable future for this venture when organizations like NetJet and other 'time-share' bizjet companies has seen new customers and revenue skyrocket since 9/11. It's also quite ironic to read the glowing article about Avolar in this months issue of Airways and then see this announcement... Good to hear from you BillG -- I haven't seen you post around and about DAC for a while. Hope all is well for you...