United Shuts Down Avolar

Sean1999 Ram Air TA · 03-27-2002, 09:04 PM

Associated Press
United Shuts Down Avolar Unit
By DAVE CARPENTER
AP Business Writer

United Shuts Down Avolar Business-Jet Unit

CHICAGO (AP) -- United Airlines is shutting down its ill-fated business jet subsidiary, Avolar Corp., less than a year after its takeoff in a more promising aviation environment.

United parent UAL Corp. announced the decision Friday and said customers were being notified.
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The airline launched Avolar last May with $250 million in seed money and was targeting the business of high-end corporate customers and wealthy individuals, who would pay the equivalent of time-share interests in the planes. The initial plan was to begin operating in early 2002 and fly as many as 200 small jets within five years, tapping into the fast-growing market for executive jets led by Berkshire Hathaway Inc (NYSE:BRKa - news).'s Executive Jets.

But the market for potential buyers dried up after last fall's terrorist attacks and UAL was unable to find sufficient customers or, subsequently, investors for the venture, which reportedly placed orders for some $2.5 billion in jets.

The first jet delivery had been expected next month.

Chief executive Jack Creighton said "every possible option" had been explored to make Avolar work since he took over the top post in October.

"Unfortunately, none of them proved financially viable in the current airline operating environment created by the downturn in the economy and exacerbated by the Sept. 11 terrorist attacks," he 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."

The Elk Grove Village, Ill.-based carrier also had run into stiff opposition to the venture from its unions, which were angered by the costly investment at a time when United said it couldn't afford to give them the contract raises they sought.

Shares in UAL closed up 56 cents, or 3.7 percent, to close at $15.70 Friday on the New York Stock Exchange before the announcement. The shares rose another 15 cents in after-hours trading.

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Steve · 03-27-2002, 09:26 PM

first smart thing from their management in a while!

Steve

UALsprtofSEA2 · 03-28-2002, 04:55 AM

They should of pulled the plug right after 9-11. It might of prevented the lose of millions of $$$.
Well, at least they did the right thing even if it took to long.

Bill G · 03-28-2002, 09:10 AM

Just read on Airliners.net that Goodwin received three times his normal pay plus bonuses and stock options for a amount I think they said around 5.4 million smackers.
Man, I wished I could get paid three times my pay for screwing up.
I'm sure he and Gangwal are laughing their butts of sipping drinks with umbrella's in them on the beach somehwere.
As Kevin O would say "Holy Crap!!!!"

Bill G

03-27-2002, 09:04 PM	#1
Sean1999 Ram Air TA Senior Collector Join Date: Jan 2001 Location: Orlando, FL Posts: 249	United Shuts Down Avolar Associated Press United Shuts Down Avolar Unit By DAVE CARPENTER AP Business Writer United Shuts Down Avolar Business-Jet Unit CHICAGO (AP) -- United Airlines is shutting down its ill-fated business jet subsidiary, Avolar Corp., less than a year after its takeoff in a more promising aviation environment. United parent UAL Corp. announced the decision Friday and said customers were being notified. ADVERTISEMENT The airline launched Avolar last May with $250 million in seed money and was targeting the business of high-end corporate customers and wealthy individuals, who would pay the equivalent of time-share interests in the planes. The initial plan was to begin operating in early 2002 and fly as many as 200 small jets within five years, tapping into the fast-growing market for executive jets led by Berkshire Hathaway Inc (NYSE:BRKa - news).'s Executive Jets. But the market for potential buyers dried up after last fall's terrorist attacks and UAL was unable to find sufficient customers or, subsequently, investors for the venture, which reportedly placed orders for some $2.5 billion in jets. The first jet delivery had been expected next month. Chief executive Jack Creighton said "every possible option" had been explored to make Avolar work since he took over the top post in October. "Unfortunately, none of them proved financially viable in the current airline operating environment created by the downturn in the economy and exacerbated by the Sept. 11 terrorist attacks," he 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." The Elk Grove Village, Ill.-based carrier also had run into stiff opposition to the venture from its unions, which were angered by the costly investment at a time when United said it couldn't afford to give them the contract raises they sought. Shares in UAL closed up 56 cents, or 3.7 percent, to close at $15.70 Friday on the New York Stock Exchange before the announcement. The shares rose another 15 cents in after-hours trading. ------ On the Net: http://www.united.com Email this story - Most-emailed articles - Most-viewed articles -------------------------------------------------------------------------------- More Quotes and News: Berkshire Hathaway Inc (NYSE:BRKa - news) UAL Corp (NYSE:UAL - news) Related News Categories: airlines/aviation

03-28-2002, 09:10 AM	#4
Bill G Insane Collector Join Date: Aug 2000 Location: Springfield, MO Posts: 1,227	Goodwin's Golden Parachute Just read on Airliners.net that Goodwin received three times his normal pay plus bonuses and stock options for a amount I think they said around 5.4 million smackers. Man, I wished I could get paid three times my pay for screwing up. I'm sure he and Gangwal are laughing their butts of sipping drinks with umbrella's in them on the beach somehwere. As Kevin O would say "Holy Crap!!!!" Bill G __________________ *Ozark Flies Your Way* FEES DON'T FLY AT SOUTHWEST

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03-27-2002, 09:26 PM	#2
Steve Master Collector Join Date: Nov 1999 Location: Northern Virginia Posts: 835	first smart thing from their management in a while! Steve

03-28-2002, 04:55 AM	#3
UALsprtofSEA2 Master Collector Join Date: May 2000 Location: Chicago Age: 45 Posts: 895	They should of pulled the plug right after 9-11. It might of prevented the lose of millions of $$$. Well, at least they did the right thing even if it took to long.