Note: Discussion questions at the end.
http://www.usatoday.com/travel/news/...-flights_x.htm
United to cut U.S. flights, focus on international routes
CHICAGO (AP) — United Airlines plans to slash the number of its domestic flights and increase its more profitable international schedule, while at the same time reducing the size of its fleet.
United's parent, UAL Corp., said Wednesday that by March 2005, it will increase the number of international flights by 14% and reduce its domestic flight schedule by 12%, shifting some of them to United Express.
"Fundamental changes in our industry, including ongoing high fuel costs, intense pricing pressure and continuing overcapacity, demand that we take aggressive steps now in implementing this plan to ensure that United remains competitive," Glenn Tilton, UAL's chairman, president and chief executive officer said in a statement.
Despite slashing labor expenses last year by more than $2.5 billion annually, United seeks more than $1 billion in additional cutbacks and wants to dump pensions in order to attract financing to get out of bankruptcy — a restructuring now in its 23rd month.
Like other major U.S. airlines, the Elk Grove Village, Ill.-based carrier is struggling amid an unprecedented slump that has worsened this year because of soaring jet-fuel prices and deepening discount competition.
The airline, the dominant carrier at Denver International Airport, says the changes announced Wednesday will result in a 3% overall decrease in available passenger seat miles. Officials also say international operations will account for more than 40% of the airline's capacity and 50% of its revenue.
United says it plans to reduce the fleet to 455 aircraft, 68 fewer than it flew in August. Officials say the airline has reduced its fleet by 112 aircraft, or nearly 20%, since 2002.
Tilton said that despite the reduction in domestic flights, United will continue to operate its five hubs in Chicago, Denver, Washington Dulles, San Francisco and Los Angeles.
He said the actions are part of United's efforts to reduce costs to competitive levels, adding that the airline is on pace to achieve $5 billion in "annual costs improvements by 2005."
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So,
1. UA is cutting back. How is this going to impact US? Will this affect our ability as US flyers when we need to use UA codeshares? It does sound like it will enhance int'l service however.
2. This sounds like what US did awhile back... streamline service and eliminate excess aircraft. The question not answered is what aircraft in the UA fleet are going to be removed.
3. Anyone want to speculate on a US/UA merger again?