United looks worldwide for new survival strategy
United Airlines’ decision to cut US flights and fly more international routes was termed “dramatic” and “a sea change.”
The New York Times said: “The move…is the clearest signal yet of the shape it expects its operations to take going forward.”
United said it would cut 12% on US flights and increase capacity on more lucrative international routes by 14%.
Much of the international increase will be in Asia where the airline plans to double capacity to China, add more service to Japan and begin flights to Vietnam.
The carrier also said it plans to reduce its mainline fleet to 455 aircraft by next March, 68 fewer aircraft than it flew last August.
“Our strategy has been to continually align our fleet size and deployment with market conditions, which are brutally competitive,” said Glenn Tilton, president and CEO of UAL Corp, United’s parent company.
He added: “Fundamental changes in our industry including ongoing high fuel costs, intense pricing pressure and continuing over-capacity, demand that we take aggressive steps now in implementing this plan to ensure that United remains competitive.”
United’s officials said they hoped the steps – and particularly the new emphasis on Asian routes – would help return the company to profitability.
United, which has operated in bankruptcy since 2002, said in a statement it is on track to reach $5 billion in annual cost improvements by 2005.
A United spokesperson said the move will probably lead to fewer flights in some markets.
Mr Tilton said the moves are part of United’s ongoing strategy to leverage its product and network, reduce costs, deliver excellent service, and focus on customer products and services.
Report by David Wilkening
David
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