Las Vegas Sun

March 28, 2024

United plans to trim fleet size

United Airlines, the world's second-largest carrier, will reduce the number of planes it flies and shift aircraft to profitable international routes to help stem losses and exit bankruptcy protection.

Seats available on international flights will rise 14 percent by March 2005 as U.S. capacity falls 12 percent, the UAL Corp. unit said today in a statement. In total, the airline will offer 3 percent fewer seats for sale. Chicago-based United will cut 68 planes from its fleet, leaving 455 aircraft.

United, which has operated in bankruptcy for almost two years, wants to reduce costs by $5 billion a year by 2005 to compete with low-fare airlines, and has targeted additional cuts of more than $1 billion. The expansion of discounters in the U.S. is holding down yield, or average fare per mile.

"Yields have been coming up and there has been some growth both in the Atlantic and the Pacific, in particular," said Jon Ash, managing director of Washington-based Global Aviation Associates. "Domestically, while there has been some traffic growth, yields continue to be severely depressed."

AMR Corp.'s American Airlines, the world's largest carrier, said Sept. 23 that it will increase international capacity 16 percent and reduce domestic capacity 2 percent this year. Planes flown by low-cost carriers such as Southwest Airlines Co. generally are large enough to fly only to cities in North America and the Caribbean.

"You want to get some of your capacity out of harm's way and to move it to places where you can generate a return on investment," Ash said in an interview. "This is what a number of the major network carriers are doing."

United's changes will boost international capacity to 41 percent of its total from 35 percent now, and international revenue will rise to 50 percent from 46 percent, spokeswoman Jean Medina said.

The airline also said it will shift some U.S. routes to its United Express commuter-carrier partners, without giving details.

Most of the international capacity increases will occur on routes to China, Japan and other areas of the Pacific, Chief Executive Glenn Tilton told workers in a message. Ted, UAL's low- fare unit, will add flights in Mexico and the Caribbean, he said.

United's passenger traffic in the Pacific has climbed 30 percent this year through September. Traffic has increased 10 percent on Atlantic routes and 9.4 percent in North America.

The Pacific routes have the highest rate of seats filled, at 84 percent, followed by Atlantic flights at 83 percent and North American at 78 percent.

The airline hasn't decided which planes will be taken out of use, and isn't targeting a specific type of aircraft, Medina said. The changes will cause an undetermined number of layoffs, she said. United customers probably won't notice any significant changes in U.S. service, Tilton said.

UAL, which sought bankruptcy protection in December 2002, said last month that weak U.S. revenue, competition and high jet- fuel prices require additional cost cuts. United Airlines said on Sept. 17 it was targeting $500 million in annual reductions in addition to $655 million identified in early September.

The carrier also is considering ending its employee pension plans to reduce costs.

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