CHICAGO -- United's parent company said it is revising its business
plan for Avolar, the corporate jet subsidiary it created last year,
after giving up on attempts to sell a majority stake in the
company.
UAL Corp. also said it won't invest any more of its own money in
Avolar, having already spent $100 million on the fledgling
operation which was created to offer charters, corporate shuttles
and fractional ownership in business aircraft.
The decisions led some analysts to forecast Avolar's demise.
"The business will probably be sold to a rival or closed in the
next few months," said Jonathan Schrader at Morningstar.
Schrader said he considered that a good outcome, because
"continued support of Avolar would have siphoned cash and attention
away from UAL's mainline carrier, United Airlines, which is in
desperate need of both right now." United lost $2.1 billion last
year.
At UAL, however, a spokesman insisted the company has not given
up on Avolar, but talk of the new business plan did not include any
specifics.
In other Avolar news, Stuart Oran stepped down as president
March 8. Doug Hacker from UAL Corp. became Avolar's acting
president, and Amos Kazzaz from United will assist with the
business plan. Avolar executive vice president and chief operating
officer Thomas Davis assumes responsibility for Avolar's day-to-day
operations.