Group of investors and bankers from St. Louis, Minneapolis, and Chicago meet in Delaware to incorporate the Continental Aviation Corporation as a holding company under that state’s laws. Initial shareholding is $2.3 million. A workforce of 25 is assembled and 5 Hamilton H-45 Metal Planes are purchased.
On September 1, the holding firm’s name is changed to Universal Aviation Corporation and the airline operating subsidiary becomes Universal Air Lines. Fifteen days later, scheduled passenger-only service is inaugurated between Chicago and Cleveland. On November 24, a Hamilton H-47 en route to Chicago from Cleveland crashes at Edgerton, Ohio, in a snowstorm (three dead). By year’s end, UAL transports a respectable 425 passengers.
On December 31, after much planning and negotiation, Universal Aviation Corporation, in a rush of acquisitions, instantly forms the first airline system in the United States, Universal Air Lines System. On that day, UAC purchases Robertson Aircraft Corporation, Northern Air Lines, and Continental Air Lines. Together with UAL, the three will be operated as subsidiary divisions of UALS.
The three subsidiaries continue operations as before in early 1929. Plans to extend the new Northern division’s Chicago to Minneapolis route beyond Fargo are reconsidered. The first 2 of 15 ordered Fokker F-10As is received; christened Miss Cleveland and Miss Chicago, they are placed into service on the route of the namesakes and complete with chefs, offer the first airline dinner service prepared on electric stoves in the rear fuselages.
On April 1, Central Airlines and Paul R. Braniff are purchased and UAC begins amalgamating its small components into a single whole with a 2,858-mile route system. Simultaneously, the corporation opens 10 flying schools from Memphis to Minneapolis and Oklahoma City to Cleveland. It also begins taking delivery of the remaining ordered Fokker F-10A trimotors, eight Fokker Model 8 Super Universals, two
Boeing Model 40Cs (obtained from Pacific Air Transport), and several Travel Air 6000s, Fairchild 71s, and Hamilton H-47 Metal Planes.
On April 16, the northern routes (totaling 617 miles) to and between Minneapolis and Fargo are closed and assigned to the Northern division. Meanwhile, the Universal Air Lines division, employing the first F-10As to be delivered, stretches its Chicago route up to Minneapolis. In a shortterm experiment designed to relieve some of the boredom of flight, the diversion of motion pictures is introduced over this new route. Projection equipment is too primitive to be successfully employed airborne.
As other F-10As become available, they are apportioned to the Northern, Central, Robertson, and Braniff divisions (those provided the latter are employed only on the Tulsa-Oklahoma City segment). The eight Super Universals are divided between the Robertson and Continental divisions while the former receives the two Boeings for its CAM-2 mail route. The Central division is given the Travel Airs while the former Braniff operation in Oklahoma receives the Fairchilds and Hamiltons. In July, the ex-Robertson Ryan B-1s are sold.
On June 15, America’s first transcontinental air-rail service is started by the Universal division; passengers embarked on the Universal Air Express will be able to cut their New York to Los Angeles travel time to just 67 hrs. 15 min. for just $85 more than an all-rail trip. Sent off by Mayor Jimmy Walker from New York overnight via the New York Central Railroad’s Southwest Limited, six passengers reach Cleveland in the morning where they board a Fokker F-10A (two others filled with media fly escort) for the flight to Garden City via Chicago and Kansas City. At the Kansas terminus by dusk, customers board the Atchison, Topeka and Santa Fe Railroad’s California Limited for completion of their journey.
On June 30, a Travel Air 4000 of the Continental division is caught in heavy fog and crashes into the radio tower of Columbus’ WAIU (one dead). A Boeing 40B-4 hits a truck while taking off from Kansas City on October 8 and crashes; none aboard are injured. On October 29, a Stear-man C3B of the Continental division crashes in fog at Mt. Vernon, Ohio (one dead). Late in the year, the corporation is purchased by a larger conglomerate, The Aviation Corporation (AVCO), which allows Universal to operate under its own identity for the remainder of the year.
On January 25, 1930, American Airways is formed as AVCO’s principal operating subsidiary through the expedient of a stock exchange. Universal receives 4,288 shares, becoming not only a division, but a stockholder as well. Its remaining story will be continued under the American Airways entry.
UNIVERSAL AIRWAYS: United States (1978-1981). Established at New Orlean’s Lake Front Airport in 1978, Universal is outfitted with 1 each Beech 18 and Beech B-80 Queenaire. Scheduled passenger and cargo services are inaugurated linking the company’s base with Gulfport, Morgan City, Patterson, Laurel/Hattiesburg, Houma, and Houston. The Beech 80 is lost in a crash landing at Gulfport, Mississippi, on March 1, 1979; however, a replacement aircraft is acquired to replace it.
Overextended, the commuter is unable to survive the crash of its second Queenaire near Madisonville, Texas, on July 2, 1981 and is history by year’s end.
UNIVERSAL JET: 2828 Donald Douglas Loop N, Santa Monica, California 90405, United States; Phone (310) 399-7371; Fax (310) 399-7341; Year Founded 1997. This new nonscheduled operator is established at Santa Monica Municipal Airport in 1997 to provide executive and small group passenger charters throughout the Western Hemisphere and to Europe. James Duggan is general manager and he employs eight pilots, who fly the company’s British Aerospace BAe (HS) 125-700A Hawker and Learjet 35A Century III.
UNIVERSAL JET AVIATION: Boca Raton Airport, 3700 Airport Road, Boca Raton, Florida 33431, United States; Phone (561) 989-0025; Fax (561) 361-0920; Http://www. aerosearch. com/compa-nies/univjet; Year Founded 1994. Michael McCauley establishes this nonscheduled carrier at Boca Raton, Florida, in 1994 to provide executive and small group passenger charters throughout the Western Hemisphere and to Europe. President McCauley, together with his brother Vice President Robert, employs five pilots who fly the company’s Lear-jet 25B, Learjet 25D, and Learjet 35A Century III.
A story in an April 1997 issue of the Boca Raton News labels the brother’s charter operation as “a Boca Raton version of the NBC sitcom ‘Wings.’”
Flight are continued during the remainder of the decade without incident.
UP AIRWAYS, LTD.: India (1994-1998). NCM (Singapore) and the state government of Uttar Pradesh join together in late 1994 to establish this airline for the express purpose of helping the latter develop the tourist potential of the Lucknow area, particularly in relation to Buddhist traffic. Capt. V. P. S. Sindu is appointed CEO.
Two Fokker F.27-500s are acquired early in 1995 and employed in April to launch pilgrim flights to cities of Agra, Bhopal, Delhi, Kanpur, Lucknow, Patna, and the Bihar Buddhist centers.
NEPC Airlines, Ltd. signs a management contract during the spring of 1996. Services begin from Delhi to Lucknow and Kulu. In April 1997, the Indian government refuses to permit foreign participation in the nation’s domestic carriers and the NCM stake is passed to the Delhi-based business house Roopali Industries.
The company is renamed SGA Aviation, Ltd. in 1998.
UPALI AVIATION, LTD.: Sri Lanka (1979-1984). Upali Aviation, Ltd. is formed at Colombo Airport in late 1979 as a subsidiary of one of the nation’s largest companies, Upali Trading, Ltd. Keenly interested in aviation, the group’s President Upali Wijewardena serves as airline chairman; A. S. Pelimuhandiram is appointed managing director. The initial fleet comprises 1 each de Havilland Canada DHC-6-300 Twin Otter, Cessna Citation executive jetliner, Cessna 206, and Bell 206B JetRanger helicopter.
In addition to corporate flight support activities, which are provided by the Citation and JetRanger, the private carrier undertakes scheduled services beginning in August 1980, linking Colombo with Anuradha-pura, Batticoloa, Jaffna, and Trincomalee.
Operations continue apace in 1981-1984. During the latter year, the decision is taken to discontinue all scheduled, charter, and flight support domestic passenger services and to concentrate only on corporate airlift. The Twin Otter is sold to Skywest Airlines (Pty.), Ltd. in Australia.
UPS (UNITED PARCEL SERVICE): 1400 North Hurstbourne Parkway, Louisville, Kentucky 40223, Phone (502) 329-6500; Fax (502) 329-6550; Http://www. ups. com; Code 5X; Year Founded 1934.
UPS is incorporated in Ohio on March 19, 1934 to provide ground freight transport services. During the next 48 years, it often contracts to have certain of its shipments flown by air. Contract carriers allow the company to introduce UPS-AIR service in 1953; it will later be known as UPS 2nd Day Air.
The company operates to all 48 contiguous states by 1975 and initiates flights to Europe in 1976 with service to Frankfurt.
To complement its already huge ground transport system and to take advantage of the possibilities opening up in air express, UPS starts its own airline. A sorting and distribution hub is opened at Louisville at decade’s end.
UPS Airlines is established in 1981 and $28 million is spent to acquire a mixed-fleet of propeller and jet freighters, including 12 Fairchild-Swearingen Expediters (cargo version of the Metro II airliner), 24 Boeing 727-100Fs, 5 Douglas DC-8-73Fs, and some 90 smaller aircraft on contract. All aircraft will be flown under contract by specialized carriers such as Evergreen International Airlines and Orion Air.
Following the lead of Federal Express Corporation, UPS begins air operations in 1982. UPS Blue Label Air Service (renamed UPS 2nd Day Air) guarantees delivery anywhere on the mainland U. S. and Oahu within 48 hours. Overnight service, UPS Next Day Air, is also started.
To promote the new service, the first company ad campaign is undertaken. The first three of four DC-8-63Fs previously operated by The Flying Tiger Line, which have been converted into DC-8-73Fs, are delivered at year’s end.
Coverage of the nation is expanded in 1983 to nearly twice the number stops and capacity available in the first year of air express service. Twelve Fairchild Expediters are now acquired and provided to Merlin Express under contract with which to operate feeder flights from large East Coast hubs to smaller regional airports. Although the fourth exFlying Tiger DC-8-73F is acquired, flights to and within Alaska are, however, suspended.
By 1984, the fleet has been upgraded further by the acquisition of 4 more B-727-100Fs and 13 DC-8-71/73Fs. A total of 55.6 million shipments are flown; it is known that $165 million in bonds are sold to pay for the freighters. Many flights are also still made under contract for UPS by other carriers, including the Lockheed L-100-30s of Southern Air Transport, the B-727-100s of Jet East International, and the DC-8-73Fs of Orion Air and Evergreen International Airlines. Between August and December, six B-747-123SFs, formerly operated by American Airlines, are purchased and turned over to Orion Air for operation on UPS’ behalf. Corporate income totals $6.83 billion and a net gain of $477 million is generated.
At the beginning of 1985, the UPS fleet includes 6 B-747-100Fs, 29 DC-8-71/73Fs (the largest DC-8 fleet in the world), 28 B-727-100Fs, 8 B-727-200Fs, and 11 Fairchild Expediters. These are all operated under contract by other specialized carriers. In June, the company guarantees next-day delivery to every point in America except Alaska, where service is resumed. New frequencies are started to and within Puerto Rico.
Contracts are let with carriers in six European nations to begin UPS services; plans are made to begin employing UPS aircraft in Europe in the future. UPS becomes launch customer for the B-757PF Package Freighter, with an order for 20, with 15 options. In October, service to Europe is begun; the lower 48 United States are now connected with destinations in France, West Germany, Belgium, Luxembourg, the Netherlands, and the U. K.
Although exact traffic and financial figures for the airline portion of the corporation are not released, officials note that 350,000 packages are moved nightly. Systemwide, a total of 2.06 billion packages are delivered, revenues total $7.68 billion, and a net profit of $568 million is reported.
In late fall 1986, construction is begun on a second cargo hub at Philadelphia; when completed in two years, the $128-million center will become a twin of the Louisville operation. The carrier joins DHL Worldwide in establishing a subsidiary, International Parcel Express (IPX) , to operate in the event that a bid for a U. S.-Japan express route proves successful.
Systemwide package deliveries increase to 2.26 billion, revenues advance to $8.62 billion, and the net gain swells to $669 million.
Beginning in June 1987, the carrier increasingly operates its own air services, replacing outside companies earlier chartered to fly express. The carrier pays cash to purchase 110 aircraft, instantly becoming the 10th largest U. S. airline. The fleet now also includes the first three newly delivered B-757-24APFs.
When the Japan express route is won by Federal Express, International Parcel Express (IPX) is wholly acquired and integrated into the UPS network. Late in the year, remaining contract partners are informed that the company will take over all of its airlift during the next year.
Systemwide, 2.49 billion packages are delivered, corporate revenue reaches $9.68 billion, and net gain totals $784 million.
The giant small-package carrier received FAA authorization in 1988 to form its own airline division and operate it as an airline. One of the fastest grawing airlines in U. S. civil aviation history, UPS Airlines is equipped with a fleet of 104 aircraft: 6 B-747-100Fs, 42 DC-8-73Fs, 38 B-727-100Fs, and 20 B-757-24AFs. A total of 844 pilots are hired and trained between January and February (and also join the International Brotherhood of Teamsters union) and each month thereafter for the remainder of the year, one more aircraft is placed into service when returned from its contract easier.
In November, Asian Courier Systems is acquired, along with its operations to Hong Kong, Malaysia, Singapore, Taiwan, and Thailand. UPS now provides international deliveries in 40 nations, along with 57 cities in the People’s Republic of China alone.
The DOT now designates the new all-cargo operation as a national. In return, the corporation reports a total of 2.68 billion packages delivered, revenues of $11.03 billion, and a net profit of $758 million.
UPS has over 241,000 people employed in its entire operation in 1989 and does not provide separate employment numbers for UPS Airlines. The fleet grows by four owned aircraft, although another 246 are leased. In January, international air delivery is extended to 18 additional countries in Europe and on the Pacific rim: Andorra, Brunei, the People’s Republic of China, Greece, Hong Kong, Indonesia, Macau, Malaysia, New Zealand, Papua New Guinea, the Philippines, Portugal, Singapore, South Korea, Spain, Taiwan, Thailand, and Turkey.
In August, weekly service is initiated from Los Angeles to Sydney via Honolulu and Nadi, Fiji. Now employing the marketing slogan “the tightest ship in the shipping business,” UPS later in the month inaugurates worldwide air-express package (up to 70 lbs.) and document delivery.
During the fall, company pilots abandon the Teamsters Union in favor of their own breakaway Independent Pilots Association (IPA).
Thrice-weekly flights begin in November from Newark to East Berlin via Cologne, to Moscow via Cologne, to Budapest via Cologne, and to Krakow and Warsaw via Cologne. Services into the U. S.S. R. are operated by German or Soviet aircraft in partnership with the ground transportation concern Sovtransavto.
The national reports its first traffic statistics. After flying 2.09 billion FTKs in almost 20,000 shipments, UPS Airlines ranks second behind Federal Express among U. S. all-cargo airlines; however, the corporation as a whole now begins ranking #1 in the Fortune 50 Transportation Companies. The parent corporation reveals that its aviation division earns revenues of $650.4 million and is profitable on both bottom lines: $32.92 million (operating) and $47.45 million (net). Shareholders’ equity totals $3.5 billion while long-term debt stands at only $165 million.
The 2,000-employee airline division operates 135 aircraft in 1990. Kent C. (“Oz”) Nelson is elected chairman/CEO of UPS in January, succeeding John W. (“Jack”) Rogers. During the month, the corporation sells $700 million in 20-year, 8 3/8% debentures through the public debt market. Also, the carrier’s first scheduled service to Asia using its own aircraft is initiated five times per week; routing of the DC-8-73Fs is An-chorage-Seoul-Hong Kong-Seoul-Anchorage. Simultaneously, UPS contracts with Northwest Airlines for cargo service from Anchorage to Tokyo (NRT). In May, B-727F Pilot Capt. Emily H. Warner retires. Capt. Warner had joined Frontier Airlines (1) in 1973, becoming the first American woman in modern times to fly for a scheduled airline. Later, she would become the first qualified woman captain with a U. S. airline. After stints with PeoplExpress Airlines and Continental Airlines, she moved on to UPS. Following her retirement, she will become an FAA examiner in Colorado.
The $183.5-million Louisville air operations facility is completed with a new maintenance center; a $2.5-million Phase III simulator center is also set up at Louisville and is equipped with three Rediffusion Simulation, Ltd. simulators worth $34 million. Construction is begun on a $53-million hub center at Ontario, California, and $1.7 billion in orders are placed for additional 25 B-757-24APFs.
A $90-million cockpit modernization program, the Electronic Flight Information System, (EFIS) is started for the DC-8Fs and B-727Fs by the Dee Howard Company of San Antonio and a $1.4-billion, five-year investment in computer technology, UPSCODE, is initiated. The first EFIS-equipped B-727-100F is ready by September.
During all this expansion, the carrier is able to match Federal Express in domestic overnight delivery operations and begins overseas expansion through the acquisition of express concerns in France, Japan, as well as the Seabourne Express Parcels division of the U. K. and Belgium based Seabourne Express, Ltd. Beginning in October, six-times-per-week flights are inaugurated from Louisville to Tokyo via Anchorage.
Cargo traffic accelerates by 14.4% to 2.39 billion FTKs. UPS Airline’s portion of the corporation’s revenues totals $891.09 million, a 37.01% increase. Costs, led by increased fuel prices in the wake of Iraq’s August 6 invasion of Kuwait, climb 42.35% to $878.94 million. These force operating income to decline to $12.14 million. The net profit slides to $37.23 million.
Five more aircraft join the fleet in 1991 as the carrier takes over 11 package delivery services in Europe. In March, Worldwide Expedited Package Service is begun from the U. S. to destinations in Europe and Asia. Weekly charters are also flown to Europe and the Soviet Union and relief supplies are flown to Bangladesh and Turkey. Several other FedEx services are now equaled, including Saturday overnight delivery, on-demand pickups, discount pricing on high-volume accounts, and computerized package tracking.
On May 25, the company announces that it will spend $400 million with the Dee Howard Company in the next two years to equip its fleet of B-727Fs with quieter engines, the Rolls Royce Tay 654-54.
By midyear, the fleet includes in operation or on order 55 B-757-200PFs, 8 B-727-200Fs, 39 B-727-100Fs, 49 DC-8Fs, and 11 B-747Fs; an additional 259 aircraft are chartered and the daily schedule features 960 domestic and 415 international segments.
One of France’s leading parcel-delivery companies, Post Transport, is acquired in August while, during the same month, UPS joins with the freight-forwarder, Yamato Transport Company, Ltd. of Tokyo, in a partnership designed to further serve the growing U. S.-Japanese freight market. A 19-month-old pay and work rules dispute with IPA pilots is settled in December. Construction is started in the fall on a $21-million hangar handling facility at Dallas (DFW).
Cargo climbs 19.2% to 2.85 billion FTKs. Revenues increase 30.4% to $1.12 billion, expenses are up 27.58% to $1.08 billion, and operating income totals $39.83 million. The net gain slips to $27.71 million.
The company’s western air hub at Ontario, California, is expanded in 1992 and the 1,000-employee headquarters operation is transferred from Greenwich, Connecticut, to Atlanta. Despite FedEx’s withdrawal and stiff competition from DHL Worldwide, UPS continues to build its European network. In April, the major purchases Star Air Parcel Service of Austria, a key agent for many of the carrier’s East European deliveries.
The new 3-Day Select air-ground delivery service is introduced during the summer. In August, a new $53-million hub facility is opened at Ontario, California. The first Rolls Royce Tay 651-54-powered B-727-100F “Quiet Freighter” enters service on December 11.
Freight accelerates 14.5% to 3.13 billion FTKs, a figure approximately half that of rival Federal Express. Revenues climb 4.5% to $1.17 billion, expenses leap up by 7% to $1.15 billion, and operating income slides to $14.68 million. The net profit decays to $7.12 million. UPS places first in the airline business with a net worth of $3.72 billion, $371 million more than second place AMR Corporation.
In 1993, Richard Oehme is chief operating officer of the 1,307-pilot UPS Airlines, which is elevated to major status by the U. S. DOT at the beginning of the year. The fleet consists of 11 B-747-100Fs, 8 B-727-200Cs, 44 B-727-100Cs, 30 B-757-24APFs, and 49 DC-8-73Fs. Also in January, the carrier becomes launch customer for the B-767-34AFER, with an order for 30. UPS Airlines now has the 15 th largest airline fleet in the world-such giants of the industry as Air France and Alitalia,
S. p.A. operate fewer aircraft.
Orders are outstanding for 25 B-757-24APFs and 30 B-767-34AFER freighters are requested in February.
Later in the year, another B-747-100F is assigned to replace a DC-8-73F on the U. S. to Europe service. Across the Atlantic, three more intraEuropean flights are scheduled. Plans are announced for a new regional sorting center at Rockford, Illinois.
Cargo rises 26.6% to 3.96 billion FTKs; over 2.9 billion packages are delivered in more than 185 countries.
Overall revenues jump 8.5% to $1.27 billion, expenses rise 4.7% to $1.21 billion, and the operating profit shoots up to $59.65 million. The net profit also surges, to $26.13 million. The parent UPS, which employs 285,000 workers, enjoys revenues of $17.8 billion, an operating profit of $1.5 billion, and net gain of $809.6 million.
Overall UPS employment in 1994 climbs 10.5% to 315,000 and 26 aircraft join the fleet. Daily service is started to Taiwan. In the first of a series of planned expansions in mainland China, the company announces on May 15 that it has opened its own business development offices in the cities of Beijing, Shanghai, and Guangzhou. The $21-million, 250,000-sq.-ft. handling facility and hangar at Dallas (DFW) opens in June.
A second regional hub, built for $60 million in only seven months, opens at Greater Rockford Airport in late November. A B-757-24APF, based at the new 70-acre Illinois facility, is employed to relieve congestion at the Louisville hub. Service-wise, a new 8:30 a. m. delivery is offered.
The next-day delivery company SonicAir is taken over in December, becoming an independent subsidiary.
During the year, the carrier begins flying its own aircraft into the territory of the former Soviet Union for the first time.
Freight traffic climbs 3.5% to 4.26 billion FTKs and revenues accelerate by 10.1% to $19.6 billion. Net gain reaches $900 million.
The workforce stands at 332,000 in 1995, a 4.8% increase. In an effort to sustain its business surge, the company announces on January 13 that it will add 29 new aircraft over the next 2 years. It also becomes launch customer for the freighter version of the B-767-34AFER, adding five (beginning in late October), along with eight more B-757-24APFs.
Plans are announced for the construction of a $400-million Asia and Pacific hub in Taiwan, while the first shovel of dirt is turned over on a new Columbia, South Carolina, hub.
While on rollout after its May 13 landing at Louisville, a DC-8-71 with three crew suffers the failure of its right main landing gear, which allows the No. 3 and No. 4 engine cowlings to settle onto the runway; no injuries are reported.
At the beginning of November, four Lockheed L-100 Hercules freighters are leased from Southern Air Transport; repainted in UPS colors, they will provide extra capacity into smaller airports for the upcoming holiday season.
The company’s contract with the 2,000 members of its Independent Pilots Association expires in December. The premier B-767-34AFER enters service later in the month flying between Louisville and Cologne.
Freight traffic grows by 14.2% to 4.87 billion FTKs making UPS the only No. 2 freight carrier behind FedEx. Operating income jumps 7.5% to $21.04 billion while costs inch up only 0.1% to $19.25 billion. Profits are up substantially over the previous year; operating income climbs to $1.79 billion, while a huge $1.04-billion net profit is posted. The airline division contributes $52.1 million (operating ) and $29.62 million (net), respectively, to the profit picture.
Company employment stands at 335,000 in 1996, a 0.6% increase.
In a highly visible operation conducted on January 7, one of the L-100 Hercules freighters leased from Southern Air Transport is employed to transport or “killer whale” Keik, star of the Free Willie films. In a 9 1/2-hr. flight from Mexico City via Monterrey and Phoenix, the Orca is delivered to a custom-designed tank at the Oregon Coast Aquarium in Newport, Oregon.
A severe winter storm throughout the Northeast region of the U. S. hampers operations to a degree between January 7 and 11.
On February 3, UPS becomes the first package-delivery company to implement distance-based pricing for its air-express service; the new fee is a tariff based on both package weight and the distance it is flown.
Also in February, a basic agreement is reached with Nippon Cargo Airlines, Ltd. concerning distribution possibilities. As NCA works with cargo and UPS with parcels, their operations do not directly cross. However, NCA will, under the agreement, be able to employ UPS’ U. S. domestic trucking network to provide a direct delivery service.
An $18-million order is placed with Flight Dynamics on April 1 for 60 head-up guidance systems; these will be installed on the carrier’s fleet of B-727QFs over the next year. After several years of sometimes-bitter negotiations, a new cargo agreement is signed between the governments of the U. S. and Japan on April 16. The accord grants UPS rights to operate 12 weekly flights to Osaka (KIX).
On May 7, a spokesperson announces that the company is actively considering a new plan for a charter service that will carry passengers on weekends when the carrier’s aircraft are idle. In this first-of-its-kind experiment, UPS will only employ a few aircraft until it is clear that the new concept works and does not detract from its principal cargo business. A week later, the decision is taken to go ahead with the charter plan.
Also in May, Challenge Air Cargo leases a B-767-34AFER from UPS on a month-to-month basis. The wide-body, which replaces a DC-8-73F leased the previous August from Southern Air Transport, will be employed to operate weekend all-cargo services from Miami (MIA) to Venezuela and Brazil.
The carrier teams up with Boeing on June 1 to announce the inauguration of Boeing Direct, the first “just-in-time” delivery system for airlines; rates discounted 10%-40% from existing aircraft parts shipping rates are offered. It is announced on June 30 that the company has hired a total of 176 new pilots during the preceding 12 months.
UPS Customhouse Brokerage, the carrier’s first full-service customs brokerage operation, is opened at Miami on July 8; it is designed to provide customs clearance for all international air shipments regardless of type. UPS also begins a Pacific Rim expansion at midyear.
On July 24, the company enters into a joint venture with the People’s Republic of China transportation company Sinotrans Pekair for establishment of a concern with branches at Shanghai and Guangzhou. Under its terms, UPS will provide service to 108 Chinese cities via Sinotrans.
The same day, it signs an agreement with Taiwan promising to locate its new Asia-Pacific hub at Taipei as a major component of its $400-million investment in the Orient.
In October, six-times-a-week code-sharing flights commence from Osaka via Taipei to Los Angeles with Nippon Cargo Airlines, Ltd. UPS had been awarded the route in April at the conclusion of bilateral talks between Japan and the U. S. Nippon is guaranteed four main deck pallet positions on the UPS B-767-34AFER.
Toward the end of the year, five B-727-100Fs, including one leased from Evergreen International Airlines, begin modification with quick-change kits to combi status so they can once again transport upwards of 113 passengers each.
Contract talks between the Independent Pilots Association and company management continue throughout the year without resolution. The flyers want parity with salaries paid at American Airlines (a 25% pay increase) while the company offers an 11% boost.
On December 27, UPS becomes the first major airline in North America to completely meet federally mandated aircraft noise reduction standards.
A total of 4.89 billion FTKs are operated, a minor 0.4% increase considered as level growth. Revenues for the airline division, however, accelerate 10% to $1.79 billion even as expenses climb 8.8% to $1.76 billion. Operating income moves up to $76.12 million and a net profit of $30.13 million is posted, up slightly from the previous year.
The fleet in 1997 includes 197 owned aircraft, with another 302 flown under charter, all of which are flown by 2,000 company pilots. From a main hub at Louisville and regional hubs at Philadelphia, Dallas, Miami, Rockford, Ontario, Columbia, Cologne/Bonn, Hong Kong, Singapore, Taipei, Montreal, and Hamilton, Ontario, over 995 daily U. S. and 559 foreign departures are flown to 391 U. S. airports and 219 more overseas.
During the last week of January, work begins on a new $59-million, 535,000-sq.-ft. advanced package-sorting facility on an 84-acre site at Memphis. The facility, which will replace one outside the airport grounds, is slated to open in late December 1998 and will allow UPS to process over a quarter of a million documents and packages per day.
On February 25, a UPS official announces that the company has just met the December 1999 federal deadline for quieting all of its noisy airplanes. With the re-engining of a final B-727-100F with Rolls-Royce Tay 650s, it thus becomes the first all-Stage III U. S. major.
In the company’s first human cargo flight, a B-727-025C charter flies 113 passengers from Pittsburgh to Orlando on March 7. President Thomas Weidemeyer comments publicly on his new service on April 26. Although the carrier is still working to speed up the time it takes to manipulate the quick-change kits on these Jumbojets back and forth from cargo to passenger use, he is looking ahead to the possibility of offering scheduled service.
Negotiations between the company and the Independent Pilots Association drag on. In April, the company withdraws its previous 11% salary increase offer. The company’s main Asian hub at Taipei is opened on April 30.
In early May, IPA union members vote 1,874 to 28 to authorize a job action if their leadership deem it necessary.
During the last week of May, a B-747F encounters Air Force One off the Irish coast, setting off the collision alarm aboard the White House jet. On June 3, officials of the USAF and the Independent Pilots Association report the incident, with the latter group calling for mandatory collision alarms on cargo aircraft.
Also on June 3, five-times-per-week B-747-121F direct service is inaugurated between Chicago (ORD) and Tokyo (NRT). The Jumbojet freight flights replace Anchorage to Tokyo service previously offered by B-767-34AFERs.
Having been called into the contract talks between the Independent Pilots Association and management, the NMB, seeing that progress cannot be made, suspends negotiations between the parties in mid-month. Plans are made to launch dual-designator flights with Nippon Cargo Airlines, Ltd. in midyear between Los Angeles and Japan.
On August 4, the Teamsters Union strikes UPS; the contest between the union’s 200,000 drivers, mechanics, and package sorters and the parcel service will be portrayed in the media as one of the century’s last great labor battles with management. Members of the company’s Independent Pilots Association support the job action, grounding the carrier’s Next Day Air and Second Day Air services.
Management personnel attempt to provide service and over the next 3 days, 105 management pilots are able to complete a daily average of 41 departures and 41 evening arrivals from Louisville; another 59 departures and arrivals are achieved by chartered aircraft. The normal three daily B-747F flights to Europe are cut to one while several wet-leased DC-10Fs deliver packages from Anchorage to Asia. In addition, numerous packages are sent as belly cargo with scheduled airlines.
Kiwi International Airlines recruits new business for its shipping services and Emery Worldwide attempts to accommodate customers sending packages in excess of 5 pounds. However, UPS’ major competitors, Federal Express (FedEx) and DHL Worldwide Express refuse most new business (the latter takes new international business), but do accept packages left in drop-off boxes. Although talks between the Teamsters and UPS resume on August 7, IPA President Capt. Bob Miller notes that, even if the ground workers’ strike is ended, the pilots could go out in an effort to resolve their contract situation.
The Teamsters Union and management resolve the job action during the month’s second week and both ground workers and pilots return to work. Negotiations for a new IPA contract must now be conducted.
On August 24, company negotiators offer the pilots a new, but “last chance” contract and ask the membership to vote on it. IPA leaders, agreeing to remain neutral, put the question to the 2,000 union flyers as the NMB negotiations adjourn in recess.
The results of the balloting are revealed in Washington, D. C. on October 1; the contract is rejected by a vote of 1,861 to 39. Although a strike was authorized the previous May, it may occur only if the NMB releases the two sides from discussions—and both sides indicate such a move is not desired. To demonstrate its support for the 1998 Winter Olympics in Nagano, Japan, the carrier unveils a special paint scheme on a new B-767-34AFER on October 2. The aircraft, which will fly its first service from Seattle to Louisville later in the day, wears the traditional UPS tail livery, but has a pure-white fuselage decorated with stick athletes.
Talks between the company and its pilots adjourn just before giving, with both sides promising to resume discussions in good faith come January 12, 1998. The arrangement will allow UPS to enjoy its peak holiday shipping season free of labor worry.
To take some of the pressure off the Louisville center during the holiday season, UPS, on December 15, begins flying packages through Nashville. The move is designed to further facilitate movement from Louisville to Nashville to New Orleans for next-day delivery as well as from the Carolinas through Nashville to Ontario, California. If the experiment is successful, company officials declare, then the move to make Nashville a permanent gateway between the Carolinas and California will be created next year.
B-727F roundtrips commence on December 17, four times a week between Washington, D. C. (IAD) and Cancun, Mexico. During the year, the B-727-100Cs assigned to passenger charters are operated from Chicago (ORD), Pittsburgh, and Detroit (DTT) to Orlando, Tampa, and San Juan.
A total of 5.37 billion FTKs are operated during the year, a 9.9% increase over 1996. Despite the strike, operating revenues advance 3.9% to $1.86 billion, while costs rise 5.3% to $1.8 billion. The operating profit, however, slides to $56.1 million and net gain is halved to $15.3 million.
Union and management in the pilot talks resume negotiations on schedule as of January 12, 1998. The two sides will reach agreement within a month. A tentative U. S.-Japan bilateral is negotiated on January 30.
Rates for most domestic air-express services are increased by 3.3% on February 7, although there are no increases in international service rates.
U. S. Secretary of Transportation Rodney E. Slater and Japanese Transport Minister Takao Fujii are the principals for the formal signing of the new U. S.-Japan bilateral air agreement in ceremonies at Washington, D. C. (IAD) on March 14.
During the first quarter, construction begins on an $860-million Hub 2000 at the Louisville base. The new facility, scheduled for completion in 2001, will replace the existing main facility and almost double the number of packages that can be processed every hour.
On March 17, company pilots, represented by the Independent Pilots Association, vote to approve a six-year contract that promises increased benefits and a 27% wage boost.
A firm commitment is made to Airbus Industrie on September 9 to accept delivery of 30 A300-622Rs, with options on 30 others, over the decade, following delivery of the first in mid-2000. The order is valued at $5 billion.
The B-727-025C charter fleet is fully engaged this year, operating on behalf of a variety of inclusive tour operators such as Apple Vacations and Vacations Express and the cruise lines Royal Caribbean and Carnival Cruise Lines. In addition to the previous destinations, Cancun and other Mexican resorts join the holiday network.
On the night of September 11, just after landing in rain at Ellington Field Airport near Houston after a service from Louisville, Flight 774, a B-767-34AFER with two crew is unable to stop. It runs 1,489 ft. off the left side of the runway before coming to a stop with its right landing gear collapsed; neither flyer is hurt.
Recently chosen as the only U. S. carrier to receive new landing rights at Paris (CDG), UPS inaugurates a direct air link from New York with a B-767-34AFER on September 14.
At the same time, as the result of a recently signed strategic agreement with Miami-based Challenge Air Cargo, enhanced scheduled express service via Brazil to South America becomes available five days a week. Beginning on September 15, Challenge will operate a wet-leased UPS B-767-34APF into Campinas, one hour from Sao Paulo. This service complements additional Latin American routes also announced by UPS and Challenge as part of their pact.
Under this agreement, Challenge has contracted with UPS to operate wet-leased B-757-24APF freighter flights between Miami and the Dominican Republic on Tuesdays, Thursdays, and Sundays and between Miami and Venezuela on Wednesdays and Fridays. A wet-leased B-767-34APF is also operated by Challenge for UPS from Miami and Honduras to Costa Rica on Saturdays.
Two B-767-34AFERs are simultaneously employed to launch new transit-timesaving flights around the world from Taipei to Bombay, the UAE, Frankfurt, London, and New York.
Also during the month, UPS provides the funds and logistical support necessary to airlift Keiko, the Orca whale star of the motion picture Free Willy, from Newport, Oregon, to its new home in Iceland.
Having found itself at loggerheads with its pilots over a new contract since July, Federal Express (FedEx), in late October and early November, begins to position itself for a possible strike during the Christmas holiday season.
UPS, which lost customers to FedEx during its own strike in August 1997, begins to court FedEx customers worried about a possible strike. On November 12, UPS announces that, if shippers come to it early enough, the largest air and ground distribution infrastructure in the world has various ways of handling additional volume before Christmas.
The FedEx pilots do not go out, choosing to settle with their employer just before Christmas.
On December 22, a new accord is reached with Sinotrans Pekair; three new regional offices will be added to the three existing stations at Beijing, Shanghai, and Guangzhou. Additionally, UPS will move into a further 18 cities across the country, serving the Chinese market directly with the UPS brand rather than through Sinotrans.
A new $59-million advanced package sorting facility is opened on an 84-acre site at Memphis in late December; the facility replaces one outside the airport grounds.
For the first time in UPS history, on December 22, online tracking requests exceed one million.
Freight traffic during the past 12 months has ascended 9.92% to 5.57 billion FTKs. Passenger bookings, meanwhile, have increased 82.2% to 133,000. Overall corporate revenues for the year climb 10.8% to $24.8 billion, while net gain rises to $1.7 billion. The airline brings in $1.99 billion and its net profit is $7.94 million. For the first time, UPS’ international operations post a profit.
In an effort to enhance its Central American service and meet customer demand, UPS, on January 19, 1999, begins dedicated roundtrip B-757-24APF all-cargo flights from Miami to San Jose, Costa Rica, five days a week. Feeder flights are simultaneously begun from San Jose to Panama City. Deliveries through San Jose to Guatemala, Honduras, El Salvador, and Nicaragua will begin before the end of the second quarter.
When negotiations between the U. S. and China open on February 23, UPS presses both sides to increase the number of cargo carriers permitted to fly into the People’s Republic. UPS does not now fly directly into China, but serves the country through its agent partnership with Sinotrans.
On March 5, UPS Chairman Kelly speaks before the Postal Service Subcommittee of the U. S. House of Representatives. He asks that any future reform of the USPS focus on creating greater accountability and oversight of the agency in order to ensure a level playing field for competitors and greater protection for consumers.
A unique mission is announced on May 5. UPS will provide a specially equipped B-767-34AEFR in September to transport a pair of rare Chinese giant pandas from the Chengdu Research Base of Giant Panda Breeding to Zoo Atlanta. It is also noted that the UPS Foundation, the company’s charitable arm, will donate $625,000 over the next five years to maintain a new state-of-the-art panda facility at the Georgia zoo.
On May 6, a B-757-24APF begins to offer five-days-a-week service between Miami and San Jose, Costa Rica, and next-day deliveries to Honduras and Guatemala.
A new B-727F charter service is inaugurated on May 15 from Hong Kong to Singapore and Kuala Lumpur.
UPS joins with Midway Airlines (2), also on May 15, to cohost a fund-raising event at Raleigh/Durham on behalf of the 1999 Special Olympics World Summer Games and the North Carolina Special Olympics team. Outside the UPS Cargo terminal, teams of eight workers from each carrier test their strength in pulling a 30,000-lb. CRJ-200ER in a first annual “Plane Pull.”
On June 1, five weekly B-757-24APF roundtrips are launched from Singapore to Taiwan via Hong Kong.
Following several weeks of negotiations, the assets of Miami-based Challenge Air Cargo, including all leased facilities, ground equipment, computer systems, and route authorities, but not including aircraft, are sold to UPS (United Parcel Service) on June 28. The move transforms UPS overnight into the largest all-cargo and express carrier in Latin America.
In September, the company, convicted of establishing Bermuda-based Overseas Partners, Ltd. in 1983 as a “sham transaction” to avoid paying U. S. taxes, faces a possible $2.35-billion liability. While preparing to appeal, it also establishes a $1.44-billion fund from which to pay back taxes, fines, and interest. The last of B-767-36AFs delivered since October 1995 is accepted on September 9.
A pair of giant Panda cubs arrives at the Atlanta Zoo on November 5 following a 17-hr. flight from Beijing via Anchorage aboard a specially equipped and decorated B-767-34AF dubbed The Panda Express. Two-year-olds Yang-Yang and Lun-Lun are on loan from China for 10 years.
In a move even more exciting in financial circles, UPS stages the largest initial public offering in U. S. history during November. The sale of 9% of the company (109.4 million shares at $50 each) is more than 9 times oversubscribed and brings in $5.47 billion.
Passenger boardings for the year rise 2.5% to 124,000, while cargo traffic accelerates 8% to 6.01 billion FTKs. Revenues advance 7.8% to $2.15 billion, while expenses are up 5.2% to $2.05 billion. The operating profit surges to $116 million, while net gain increases to $66.27 million.
Corporate employment at the beginning of 2000 totals 308,000. Among the world’s top 25 airlines, UPS leads in employee numbers, ranks 3rd in FTKs, and 13th in fleet size.
It is reported in March that DHL Airways will soon be taken over by the combined forces of Deutsche Post and Deutsche Lufthansa, A. G. Each has a 25%-plus-1-share stake in the company and its European counterpart, DHL International. Although smaller than either Federal Express (FedEx) or UPS, DHL Worldwide Express (parent of both DHL-A and DHL-I) leads both in cross-border mail and express deliveries (38% against 20% for the former and 15% for the latter). It has also made purchases in trucking, logistics, and air freight that rivals both of the American giants.
The story is part of a general revelation in the aviation media that Deutsche Post and Deutsche Lufthansa Group are reviewing several schemes for a joint-venture (code-named PELIKAN) merging of their logistic activities. PELIKAN would see the joining of DHL Worldwide with Lufthansa Cargo Airlines, A. G. and with Deutsche Post-owned Air Express International.
At this point, UPS demands that the EU Commission require Deutsche Post to split up its commercial and public service activities. UPS had originally petitioned the Commission in 1994, alleging unfair competition in the parcel post sector. Now it emerges that Deutsche Post has invested almost $5 billion in the years since to build up its parcel post activities, while recently engaging in alliance discussions with DHL and Deutsche Lufthansa, A. G. It is anticipated that the Commission will respond by April, but it will not open its formal investigation until August.
On May 1, the company begins flying a number of its own freighters over certain of the Latin American routes of Challenge Air Cargo. CAC will continue to operate others until the remainder of the route authorities have been transferred.
As a supplement to the weekly B-747F roundtrip flown from Louisville to Sydney, a second, Saturday-Monday Australian return service, is introduced on May 26. It is flown by a B-747-300F from Ontario, California, via Honolulu and Nadi.
When Gemini Air Cargo’s first MD-11F enters service on June 12, it is operated on behalf of UPS between Louisville and Seattle. During July, UPS and Federal Express (FedEx) are both anchor tenants of the new 172,000-sq.-ft. cargo facility that opens at Sky Harbor International Airport, Phoenix.
The first of 30 A300F4-622Rs is received on July 25. On August 22, Flight International, in its annual commercial airline survey, reports that UPS is the third largest cargo airline behind Federal Express (FedEx) and Lufthansa Cargo, A. G.
Two more A300F4-622Rs are delivered in September, one each on the 12th and 21st.
The company’s weekly return service between Taipei and Bangkok is upgraded to six times a week on September 25. It is announced on October 3 that Executive Vice President Michael Eskew will become board vice chairman and that UPS Airlines President Thomas H. Weidemyer will become chief operating officer of the UPS parent corporation on January 1, succeeding the retiring Charles L. Schaffer. Also announced is the appointment of Vice President-Finance D. Scott Davis as chief financial officer.
The fourth and fifth A300F4-622Rs are delivered on October 20 and October 30, respectively.
Also in October, an Airbus Industrie A300F4-622R all-cargo roundtrip service is begun on behalf of UPS by the Turkish freight operator MNG Cargo Airlines, A. S. between Hong Kong and Singapore.
At the beginning of November, arrangements, valued at $2 billion, are completed with Boeing for the acquisition of 13 previously employed MD-11s that would be converted into freighters and delivered in 2001-2004. It also takes options on another 22 for possible delivery by the end of the decade.
Additionally, UPS joins with India’s largest general sales agency, Je-tair, Ltd., to create a joint venture company based at Bombay that will provide international express delivery services throughout India beginning in early 2001.
Previously operated by Tower Air, a B-747-259C is acquired under lease on November 21. On November 27, the twice-weekly “Round the World” service is boosted to five times a week; the B-767Fs are routed from Louisville via Cologne, Sharjah, Bombay, Singapore, Taipei, and Anchorage. A sixth A300F4-622R is delivered on November 29 and is followed by a seventh, the last for the year, on December 8. Thirteen more will arrive in 2001 and nine in 2002.
Although it has been operating to Hong Kong since 1988, UPS has no beyond-rights. In December, in the wake of the lapse of rights given to Continental Micronesia in 1996, the carrier seeks acquisition of that authority. If granted, UPS will hub at Hong Kong, a move made particularly important in light of the company’s newly received award of six more weekly all-cargo routes to China from the U. S.
Also in December, the company announces a $30-million investment in its hub facility at Miami International Airport. The improvements are aimed at enhancing services to and from Latin America.
On December 22, the concern announces that it is terminating its Olympic sponsorship. One each B-747F, B-757PF, and B-767F wearing Olympic-theme livery will soon be repainted.
At the end of the year, competitor Federal Express (FedEx) prepares to sign a major contract with the U. S. Postal Service. UPS, for its part, places a follow-on order for 60 A300-600Fs, with options on another 50, for delivery beginning in 2003. The $6-billion request is the largest in company history.
Passenger boardings this year rise 8.6% to 134,000, while freight traffic jumps 5.24% to 6.33 billion FTKs.
World History
