UNITED AIR LINES, INC.

           In January 1929 William Allan “Pat” Patterson joined Boeing as Philip Johnson’s assistant. As President of United Aircraft and Transport Company, Johnson was usually in the New York City headquarters or in Washington D.C. on Boeing’s military airplane business. Johnson gave Pat Patterson the authority to “make decisions as he saw fit” regarding Boeing Air Transport and the newly acquired Pacific Air Transport.

           April 1, 1930 United Air Lines, Incorporated was created as a “management company” for the four air transport companies (BAT, PAT, NAT & Stout) with Johnson as President. Johnson was also the President of each of the individual air transport companies. UATC then merged Stout and NAT. Following the Varney acquisition later in 1930 the airlines again numbered four. At this time the “United Air Lines” logos (above) were used.

           In midsummer 1931, Pat Patterson was named General Manager of United Air Lines, Inc. and moved from Seattle to Chicago, taking charge of the LaSalle-Wacker United Air Lines Headquarters building.

           United Air Lines, Inc. owned no airplanes or other equipment, signed no contracts, had no earnings and was supported jointly by the airlines. This was to become important on February 9, 1934 when the government abruptly canceled the mail contracts. At the time, money from the air mail contracts was 45 percent of United’s total revenue and although increasing steadily, passenger and cargo revenue alone fell far short of supporting the airline.

           Following the air mail contract suspensions, Patterson made the decision to keep all four of his companies flying their full schedules, hoping that additional passengers, express and cargo would replace the lost mail revenue. His argument was “Our pilots and ground crews have to eat … this is our opportunity to show our people that they are in a stable business”. United lost more than one million dollars during the quarter that followed, flying with half-full airplanes.

           The U.S. Government’s decision to have Army pilots fly the mail was disastrous. After 78 days twelve Army pilots died, ten in the first 3 weeks. President Roosevelt then put the mail contracts back out for bids.

           The 1934 Executive Order by President Roosevelt stated that no airline executive who had attended Postmaster Brown’s (so-called) “Spoils Conference” in 1930 could receive an air mail contract for 5 years. Following the edict from Roosevelt, the U.S. Congress passed the Air Mail Act of June 12, 1934 giving the Interstate Commerce Commission power to regulate the air mail rates. Further, the Air Mail Act outlawed any financial or interlocking directorate connections between airlines and aircraft manufacturing businesses.

           The Air Mail Act even outlawed Philip Johnson from his presidency of the United unit that manufactured Wasp and Hornet engines because the engines were purchased by the U.S. government for military planes. Johnson bitterly gave up his Presidencies in United Air Lines and United Aircraft & Transport Corporation. William Boeing, also bitter over Roosevelt’s injustice, resigned as Chairman and quit the airplane business. C.D. Howe, the Minister of Transport in Canada, invited Johnson to Canada where in 18 months, Johnson organized Trans-Canada Airlines.

           In 1939, a day after Roosevelt declared a State of National Emergency, Johnson returned to Boeing Airplane Company as President and set the pace for Boeing’s amazing WWII war-production effort.

           The Air Mail Act gave United Aircraft & Transport, Corp. five and one-half months to “unscramble”. This job fell to Joe Ripley, the man who had put it together originally. The reorganization was approved at a stockholder’s meeting July 11, 1934. Ripley created three new operating companies: United Aircraft Corporation, Boeing Airplane Company and United Air Lines Transport Corporation (United Air Lines).

           In order to file new mail bids, other airlines had quickly changed officers and resumed operations under new names. American Airways became American Airlines and Eastern Air Transport became Eastern Airlines.

           Claire Egtvedt became president of the Boeing Airplane Company following the breakup. With only $600,000 remaining in the treasury and no sales prospects for the Boeing 247 transport due to the success of the Douglas DC-2, Boeing workers were laid off, the numbers dropping from 1700 to 600. Fortunately, later in 1934 the U.S. Army awarded Boeing a contract to develop a large long-range bomber, the XB-15 (below), that was designated Boeing’s Model 294. The experience gained in producing this single prototype was later very useful in designing the famed B17 “Flying Fortress” bomber.

           During the government-forced reorganization, Joe Ripley was able to get United Air Lines off the ground, free of debt and with $4,000,000 in working capital. The airline division previously had approximately one-third of the assets of The United Aircraft and Transportation holding company but received more than half of the capital.

           Ripley also urged Rentschler and other heads of the holding company to name Pat Patterson as Philip Johnson’s successor as President of United Air Lines. Patterson, a junior officer of United Air Lines in 1930 remained “untouched by the purge” because he had not been invited to Postmaster Brown’s “spoils” meeting.

           On April 13, 1934 Patterson assumed the presidency of the newly incorporated Delaware company, United Air Lines Transportation Company. To the public, it was still “United Air Lines” and in 1943 the name was officially changed back.

           Following the reorganization United bid-for and won-back all of its former routes except the Chicago-Dallas route where Braniff Air Lines underbid United (by half). United continued to fly the Chicago-Kansas City segment as a passenger route until May 12, 1934.

           The Air Mail Act added two more hoops-to-jump-through. In addition to the U.S. Post Office, the airlines now had to deal with the Interstate Commerce Commission and the Department of Commerce.

           The ICC cut United’s average return on air mail from 38 cents to 31 cents per-plane-mile and also put a 300 pound-per-plane limit on what the Post Office could pay. As a result United had to fly many 300 pound bags of mail for free. This loss of income led to the cancellation of the Chicago-Kansas City passenger flights.

           A last-minute clause in the Air Mail Act forbade any carrier from holding air mail contracts for more than one Primary route and two Secondary routes. United’s Transcontinental route was designated a Primary route as was its Pacific Air Transport route. This meant that United could not keep the PAT route unless it was split-off into a separate company and was completely independent of United. Faced with protests from Pacific Coast cities, Congress relented and designated the PAT route a Secondary route.

           The “unmerger” proved to be a good thing for Pat Patterson and the airline. He no longer had to answer to Hartford or New York regarding airline management or purchasing decisions. It was no longer necessary to fly only Boeing planes or to buy only Wasp engines if other companies offered better planes or equipment. Thus, in 1934 management decisions for running the airline moved from Park Avenue, New York to the LaSalle-Wacker building in Chicago where the airline headquarters had grown from one small office in 1929 to occupy two entire floors.

           Harold Crary, who had opened the original office, became the Director of Traffic, Advertising & Publicity. Duard B. Colyer, a veteran of the Post Office Air Mail days as Superintendent of Operations for Boeing, became Vice-president in charge of Operations. Other new officers were Cyril B. Thompson, Secretary and Charles E. Brink, (who refused to fly) Treasurer. Moving into Technical and Executive positions were line-pilots Jack Herlihy, Bert Lott, Walt Addems and Russ Cunningham.

           In 1934, United was left with 6000 miles of airways. Crary advertised United as “Air Transportation at its Best with passengers flown in Heated, Comfortable Cabin-Planes Coast-to-Coast in 20 hours for $160 ($288 round-trip)”. United also boasted of “fifty-million miles of flying experience and 4 experts on the ground for every pilot aloft”.

           With the new government regulations and restrictions on the air mail, United’s revenues for 1934 fell below those of 1932. This forced stringent economies and resulted in the cancellation of the Chicago-Kansas City passenger run. Patterson sought relief, petitioning the Interstate Commerce Commission for hearings. It was 2 years before the ICC made an adjustment in the rates.

           As United President Pat Patterson remarked later, “… the air mail cancellations were a blessing in disguise … it was a spanking that made us better boys”.

           Traffic staffs hustled as never before to find passengers and cargo and they got results. In 1933, on the Chicago-New York run, passenger revenue had constituted 40 percent of airline income, by 1936 it had risen to almost 58 percent of United’s total earnings.