United: Slimmer seats equals fatter profits
United Airlines has updated investors on a number of initiatives to boost revenue and cut costs, including the installation of slimline seats, shifting to larger aircraft, improving its reliability to attract more premium passengers and adding new routes.
The carrier told investors that trimming expenses and boosting revenue would provide it with a cumulative $3.1 billion between 2015 and 2018.
It said that ‘upgauging’ its aircraft and adding slimmer seats, combined with ‘sensible cost management’, would bring $1.3 billion of benefits.
Increasing customer segmentation, updates to its MileagePlus programme and modification to its revenue management system should drive an additional $1.5 billion of value, it said.
The airline expects that improving its reliability will make it approximately $300 million.
"This operational improvement will grow United’s share of premium customers, reduce costs associated with delays and cancellations, decrease the number of passengers re-accommodated on other airlines and improve schedule utility," the airline said.
It said it had already achieved ‘significant’ improvements in its on-time arrival performance, finishing first or second among rivals all year.~
"As United continues its focus on elevating the customer experience, it recently announced the all-new United Polaris business class, free snacks and transformed airport clubs," it said in a statement.
"And on July 1, United will introduce illy premium coffee on board all flights. Additionally, the company is expanding its industry-leading route network with new service to several destinations across Europe and Asia, including its new flight between San Francisco and Singapore."
The parent of United Airlines is detailing plans to improve financial performance and softening its forecast for a decline in a key revenue figure.
Parent company United Continental Holdings told investors that second-quarter revenue will drop between 6.5% and 7.5% compared with a year ago du to falling fares, but the drop is slightly less than originally forecast.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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