Continental, originally Varney Speed Services, started out like many airlines from the 1930s, carrying mail for the United States Postal service. With a focus on the Southwestern United States and new mail routes, Robert Six bought the Southwest division of Varney. In 1937, he moved the airline’s headquarters to Denver Stapleton Airport and changed the name from Varney to Continental. He made the latter move to reflect his desire for the airline to fly throughout the entire United States.
When the Second World War came around, Continental’s maintenance facility in Denver was used by the United States Air Force to work on B-17s, B-29s, and P-51s. After the war, Continental used the money earned from the Air Force to purchase new aircraft such as the DC-3 and Convair 340s. With this influx of cash and aircraft the airline began to further expand into the southwest, adding routes to Albuquerque and El Paso. In 1955, the company was able to expand their reach into Texas with the purchase of Pioneer Airlines. Pioneer added a total of 16 cities to Continental’s route network.
In 1955 Continental’s route network grew to 54 cities, but didn’t reach beyond Denver in the North, Kansas City in the East, El Paso in the West, or Houston in the South. The remedy to this and to become what Six desired, a Continental Airline, began with the addition of a Chicago-Denver-Los Angeles route in 1957 utilizing DC-7s.
A key acquisition in the Pioneer merger was not aircrafts or routes, but Pioneer Executive Vice President Harding Lawrence. He implemented numerous changes to the airline and introduced unique advertising campaigns. During his ten year period at Continental, Lawrence was a key player behind the scenes. In fact, Six was quoted numerous times that the main reason Continental purchased Pioneer was to acquire Lawrence’s services. After his ten years at Continental, Lawrence went to head Braniff Airways and lead them to sizable growth.
Robert Six’s desire for growth grew with age. In the early 60s he petitioned the CAB for longer routes so Continental could compete with the trunk carriers of United, American, and TWA. At the same time, Six was in talks with Boeing to become one of the first operators of the Boeing 707. Timing became key for Continental as the jets wouldn’t be viable without the routes and the routes without the jets.
The CAB relented and Six was able to grow Continental even more. In 1960, Continental flew three times more passenger miles than it had in 1956. The growth was helped with the introduction of lower fares. Six believed airlines would grow from more passenger traffic rather than higher fares and Continental became the first airline to offer Economy fares between Chicago and Los Angeles. Continental’s growth was also helped by the addition of the Boeing 707 in 1959, between Chicago and Los Angeles. They also created a revolutionary maintenance program that allowed them to operate their Boeing 707 fleet 7 days a week and 11 hours a day.
Throughout the 1960s, Continental began to grow and revitalize their turboprop fleet with jets. The DC-9 and the Boeing 727 became a workhorse for Continental becoming a mainstay in the domestic fleet for years to come. It was during this time of reform that Continental began to use the prominent “Meatball” logo.
The late 1960s provided Continental with a unique hub, Guam. As featured in an earlier AirlineGeeks article, Continental’s Guam hub gave them a foothold in the South Pacific. Guam holds a large operating base for United, which merged with Continental.
In 1970, the airline became the second to domestically operate the Boeing 747. Six created an extraordinary experience for passengers on their 747 aircraft with Corden-Bleu trained chefs providing meals and cabins that made all others at the time inferior. The airline was considered to be one of the classiest in the United States, as stated by Hollywood actor, Henry Fonda, “This operation is class: strictly class.”
Two years later Continental added the DC-10 to the fleet. The aircraft would remain in the fleet till the early 2000’s. The DC-10 soon replaced the 747’s on most routes except the Chicago-Los Angeles-Honolulu route. The DC-10 became common at the Denver hub and used on domestic routes to major cities. The luxurious 747s were phased out in 1978 in favor of the DC-10 due to the oil crisis at the time. From the late 70s, Continental operated just DC-10s and Boeing 727s till the merger with Texas International.
The late 70s also brought the deregulation era to Continental, with expansions domestically now available to the airline that was previously unachievable. The airline expanded East into Florida and West to San Diego. Service also expanded into the Northeast with service to New York and Washington D.C. The airline took the deregulation era in stride. Other airlines began to suffer heavy losses from rapid expansion, but Continental stabled growth and was able to find profits.
The 1980s brought a new owner to Continental, Texas Air Group. Texas Air Group’s president believed Continental was stuck in the pre-deregulation era and needed rapid changes if it was to survive. He merged Continental with his Texas International, retaining the Continental branding. The combined airline served four continents with a fleet of 112 aircraft. Lorenzo also moved Continentals headquarters to Texas Air’s Houston base. This resulted in major expansion at the Houston hub, and into Mexico and South America.
However during this time or merger, airline unions fought with the company at every point possible. This constant battle combined with Continental’s already weak financial stability led to Continental filing for Chapter 11 bankruptcy protection in 1983. The airline began to reorganize and created new contracts for pilots and labor workers. However during this period work moral and loyalty hit a low as Continental was often cited for poor customer service and poor reliability. Also, Continental began service to London from Houston in 1985. Continental was able to exit from bankruptcy protection in 1986 with a stronger route network and more competitive hubs.
Later, in 1986 the airline began the process to merge with PeopleExpress. Although People was losing money, the merger gave Continental routes from Newark to Paris and London as well as a stronger presences at Newark. A year later Continental entered a strategic partnership with SAS and introduced their OnePass frequent flier reward program. The future was beginning to look bright for Continental.
(Part two will appear tomorrow as a Flashback Friday Article)
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