Air Mike to Continental Micronesia

By the end of the 1980s Air Micronesia was going from strength to strength, whereas its shareholder and partner Continental was struggling with the Texas Air ownership and the amalgamation of PeoplExpress, Frontier, PBA and assets from Eastern. Briefly it looked like Continental's influence would wane, but eventually as CO recovered the whole organisation was rebranded and gradually grew closer to the mainline operation.

For part 1 of this story see:

Trust in Mike: Air Micronesia

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Into the late 1980s and Air Micronesia's aircraft were almost impossible to tell apart from standard Continental mainline fleet members aside from the small Micronesian flag on the rear fuselage roof. Indeed, the airline was by that time known as Continental Air Micronesia. They had switched from the black meatball of the Bob Six era to the red meatball of the Lorenzo years and 727s continued to be added. The first 727, N2475, was returned to Continental in April 1989, but several others were leased, although it was the 727-200 that now made up the bulk of the fleet.

N69741 at Chuuk (Truk) in November 1997. Kambui, CC BY 2.0 , via Wikimedia Commons

Continental Airlines filed for bankruptcy protection on December 3, 1990 and one of the assets it looked to shift was its shareholding in Air Micronesia. By October 1991 the airline had been for sale for over a year and negotiations were ongoing to sell its stake for $250 million. The buyers were mooted to be an investor group, Pacific Micronesia Corp, which included some of Air Micronesia's management plus executives from Pan Am and Continental itself. 

By the end of October this deal was agreed but by April 1992 the deal was dead. Continental accused Pacific Micronesia Corp of breaking the contract and trying to reopen price negotiations. By that time the sale appears to have been less important to Continental than earlier and it instead used it as collateral for loans.

An agreement with DHL saw several 727-200 Freighters operated. Here is N622DH at Manila in 1996. JetPix (GFDL 1.2 or GFDL 1.2 ), via Wikimedia Commons

Instead of the sale Air Micronesia was reorganised and spun off as a completely seperate airline - to be known as Continental Micronesia. Prior to this Air Mike had used CO's AOC but the new airline gained its own FAA operating certificate. The existing assets of Air Micronesia and its route authorities were transferred to the new carrier.

The structure of the new company was 91% ownership by Continental and 9% by the United Micronesia Development Corporation (the former majority owner of Air Micronesia). 

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The new Continental Micronesia (CMI) was quickly a significantly larger operation than its predecessor. The 1995 CO Annual Report states:

'CMI provides service to seven cities in Japan, more than any other United States carrier, and to other Pacific rim destinations, including Taiwan, the Philippines, Hong Kong, South Korea and Indonesia.  CMI is the principal air carrier in the Micronesian Islands, where it pioneered scheduled air service in 1968.  CMI's route system is linked to the United States market through Honolulu, which CMI serves non-stop from both Tokyo and Guam.  CMI and Continental also maintain a code-sharing agreement and coordinate schedules on certain flights from the west coast of the United States to Honolulu, and from Honolulu to Guam and Tokyo to facilitate travel from the United States into CMI's route system.'

DC-10-10 N68044 at Tokyo Narita. JetPix (GFDL 1.2 or GFDL 1.2 ), via Wikimedia Commons

To operate this enhanced network CMI was not flying just 727-200s, in the new Globe scheme, but also widebody McDonnell Douglas DC-10-10s. Five aircraft were transferred from the mainline operation starting in January 1994.

The trio of transitioned 727-100s were retired in 1993 and new 727-200s, including some aircraft configured as freighters added. At least 19 727-200s would see service during the 1990s. Even more impressively a pair of 747-200s were taken over by Continental Micronesia in 1995. One, N33021, was a former Alitalia and PeoplExpress aircraft and the other, N78019, had served with Lufthansa, Braniff, British Caledonian and British Airways. 

N14024 at Honolulu. Photo by Ken Fielding

A third 747-200, N14024 ex-Qantas and PeoplExpress, arrived in March 1997. The 747s saw service into 1998/1999 and would be regulars at Tokyo Narita. 1998 was a watershed year as the Asian business crisis impacted the airline and it responded by revising its Guam hub and acquiring new Boeing 757s from the parent. 

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The route map in 1998

Another Schabak Fantasy Model in 600 scale

As far as I'm aware the 757s never wore Continental Micronesia titles (although a 1:600 scale Schabak model was produced with them). In June 1997 Continental had acquired the remaining 9% of the airline and as a fully owned subsidiary the road began towards eventual consolidation with the parent. 

N19130 was one of the 757s operated by CMI. Seen here at KIX in January 1999. Photo by Ken Fielding

The 757s were the replacement for the DC-10s and 747s while the fleet of 727s was replaced also. In 1999 6 brand new Boeing 737-824s would join the fleet. As with the 757s due to aircraft being rotated around the fleet more regularly Micronesia titles were not worn.

Ken Fielding/https://www.flickr.com/photos/kenfielding, CC BY-SA 3.0 , via Wikimedia Commons

The new century would see CMI acquire some 767-400s and continue to do its job well, however the mega-merger of Continental and United would see its own AOC merged into Continental's in late 2010. It wouldn't be until March 2017 that Continental Micronesia would officially cease to exist and be merged into United, but by then it had been flying in United colours for some time.

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References

1991, Oct. Continental Air Gets Bid for its Share in Airline. Los Angeles Times
1992, April. ​Continental Backs Out of Pacific Sale. Los Angeles Times
​1995. Annual Report for the Fiscal Year Ended Dec 31, 1995
1997. Continental Plans to Buy All of Air Micronesia. New York Times
1998. Continental Micronesia Fights Asia Crisis. Flight Global
2017. United and Continental Micronesia to merge in April. Flight Global