page_title: History of United Airlines
section_title: Employee Stock Ownership Plan
hierarchical_section_title: History of United Airlines / History / Employee Stock Ownership Plan
caption_attribution_description: English: United Airlines Boeing 777 taking off at Schiphol Airport
context_page_description: United Airlines is the third largest airline in the world, with 86,852 employees and 721 aircraft. It was the brainchild of William Boeing and emerged from his consolidation of numerous carriers and equipment manufacturers from 1928 to 1930.
context_section_description: The decline of Pan American World Airways offered opportunities; in 1991 United purchased Pan Am's routes to London Heathrow Airport. In direct negotiations with the UK government United also obtained rights to fly to Heathrow from Chicago. However, the aftermath of the Gulf War and competition from low-cost carriers led to losses of US$332 million in 1991 and US$957 million in 1992. In 1992 United purchased now-defunct Pan Am's Latin American and Caribbean routes and Miami gates, but United allowed months to elapse between Pan Am's demise and its launch of service.
  In 1994 United's pilots, machinists, bag handlers and non-contract employees agreed to acquire 55% of company stock in exchange for 15% to 25% salary concessions. The flight attendants voted to not participate in the deal, and at the beginning some wore buttons saying "we just work here." The Employee Stock Ownership Plan (ESOP) made United the largest employee-owned corporation in the world. United used the opportunity to create a low-cost subsidiary, Shuttle by United, in an attempt to compete with low-cost carriers.
  United used its employee-ownership in its marketing communications, with slogans such as "the employee-owners of United invite you to come fly the friendly skies," "we don't just work here," and "thank you for calling United Airlines; please hold and one of our owner-representatives will be with you shortly."
  The financial outcomes of the ESOP were decidedly uneven for different players. As part of ESOP agreement, United CEO Stephen Wolf resigned and took a consulting job with Lazard Freres, the very investment company he had hired to advise United's board during the ESOP buyout process. Stewart Oran, the key legal advisor to the pilots' union, received a $5.5 million package to join the management of the new employee-owned company as legal counsel after the ESOP was formed. United's unions, having larger voice in running the company, later successfully bargained for significant pay increases, but the effect was only short-term. The rank and file employees were locked into their stock, which got wiped out in the eventual bankruptcy.
  It was around this period (in 1993) that United introduced its grey and blue color scheme. It had been criticized that the color scheme blended with the darkness during nighttime operations.
caption: United Airlines Boeing 777-200 with the Saul Bass logo at Amsterdam Airport Schiphol in the "Battleship Grey" livery, used 1993–2004 and common until the merger with Continental Airlines
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