Employee share ownership divides at United Airlines: Trade unions retain their traditional power‐base

Top management at bankrupt US airline United overestimated employees’ commitment to the company following an employee share‐ownership plan and underestimated unions’ power as representatives of the employees. The airline had lacked a truly entrepreneurial approach for many decades, partly because it had not had a single major shareholder. Deregulation of the US airline industry in the late 1970s, serious overcapacity in the industry and economic downturn, were other important factors leading to United’s restructuring in the mid‐1990s.