http://biz.yahoo.com/rb/041006/airlines_ual_4.html

The No. 2 U.S. carrier also said it plans to reduce its mainline fleet to 455 aircraft by next March, 68 fewer than it flew in August 2004 and a reduction of 112, or nearly 20 percent, since 2002.

It said it would increase international capacity by 14 percent and cut mainline domestic capacity by 12 percent.

"Our strategy has been to continually align our fleet size and deployment with market conditions, which are brutally competitive," Glenn Tilton, UAL chairman and chief executive officer, said in a statement.

Edited to add further news:

http://biz.yahoo.com/prnews/041006/nyw065_1.html

Tilton pointed out that the actions United is announcing are part of
United's ongoing strategy to:
-- Leverage Product Portfolio and Network: United's product portfolio and
worldwide route network give United the flexibility to put the right
product in the right market at the right price to meet customer demand
while generating a profit for the company.
-- Reduce Costs: United continues to reduce its costs to competitive
levels. The company is on track to achieve $5 billion in annual cost
improvements by 2005.
-- Deliver Operational Excellence: United continues to lead the industry
in operational excellence.
-- Focus on Customer Service and Investment: United maintains a sharp
focus on customers by investing in innovative products and services,
including expanding the availability of United EasyCheck-in and other
electronic and online ticketing and notification systems,


[Edited 2004-10-06 14:09:35]

Will the 737's go and they keep the A319/20 seies aircraft? "Tightening the belt" is good for UA. Be most efficient with certain aircraft. Robert NWDC10

I am sure it is their 737-500s and 767-200s, or some combination thereof.

So this is described as an outright cut rather than a shifting from mainline to regional jets? Here at Manchester, NH we have whistled by the graveyard by maintaining (for the most part) our mainline flights...even graduating to the 757 on some of our 4-5 dailies. But this cutback most certainly will set us back, along with many small-to-medium cities. I'd like to say that you can't put the genie back into the bottle, so when (if) UAL decides to dump Manchester or other cities of its size, some other carrier most certainly will step in. Almost as certainly, it will be an LCC. All conjecture at this point, and maybe Manchester and all the other 'Manchesters' will whistle by the graveyard again. But I don't see how UAL can hit these metrics without it affecting us.

Chris in NH

I'm thinking most of these flights will be replaced by UAX? On the other hand, UA cut a lot of flights out of MIA and other stations, so some cuts could come from there. Didn't they also cut SNA-SFO? I know that ORD-IND is being replaced by UAX anyway. This is good for UA, cut unprofitable routes and simplify the fleet. Anything that will help int'l traffic is good IMO, as that's where the money is these days.

Any word yet on which stations will get the reductions?

Why did they cut back their LHR ops and sell their slots if they plan to grow internationally?

If they cut the fleet to 455 jets, will they have a smaller fleet than Delta?

IMO, this is a smart move. They need to consolidate fleet types to reduce costs. it would make perfect sense for them to axe the 737-500 and 767-200. They are worn out anyway and need replacement. When the time is right I'm sure they will go with more A-319/320 and then follow up with a 7e7 order down the road in a year or two.

I wish DL would look at what UAL is doing and consolidate fleet types to about 3 or 4.

If you translate the numbers correctly, the headline is just an attention getter by the media.


Truth be told:

"The airline says the changes will result in a 3 percent overall decrease in available passenger seat miles. Officials also say international operations will account for more than 40 percent of the airline's capacity and 50 percent of its revenue." - UNITED




"I'm thinking most of these flights will be replaced by UAX?"

Most of the cut UA mainline flights will be run by United Express carriers.

The 737-500s are extremely young compared to the 737-300s.

N

This proposed shift of flights by UA is interesting and hopefully will save them. They cannot really compete vs. the LCC's like WN in many shorter haul domestic markets now served mainline. Shifting to more international flights, they will probably have more f/a's & pilots based outside the USA. This could lower labor costs as those based outside the USA are not part of the labor packages, pension plans, health care insurance needed to be provided USA based crews. By shifting some domestic shorter hauls to regional connected carriers gets them out of a high cost business and lets them concentrate where most majors make their money, long haul international business.

Instead of gettign rid of the 762s and 735s, could they be getting rid of the 762s and 733s? I have recently seen an A319 on the DEN-BOI route (this summer flying BOI-OMA on NW, A319 was being prepared for flight while I was waiting for my flight). Besides, the A319 and 733 are basically the same size, while the 735 is smaller, so that would make more sense to me.

ChrisNH: I wonder the same about Upstate New York. AA ended 50 years of mainline service to BUF/ROC/SYR/ALB a couple of years ago. (I know about the AA seasonal mainline BUF-DFW, but that's not year-round) At the time we A.net Upstaters wondered whether UA would do the same thing. We already see a mixture of UA and UA Express on ORD routes. It would be sad, but not terribly surprising, if UA downgraded us to all Express.

Which would only wave a red flag in WN's face to start BUF-MDW and ALB-MDW.

Jim

They are getting rid of a mixture of 733s and 735s. Lots of it has to do with leases that were not able to be renegotiated for what United wanted.

While the 735s are younger, their OCASM is higher because of essentially the same variable costs for less seats (read: 735 isn't that much cheaper to operate than the 733).

its great to see UAL be PROACTIVE, even if everything isn't working.

TED to go after domestic traffic
LUXURY B757 to go after intercontinental traffic
EXPAND international traffic.

the other US airlines are in the toilet. what are they doing?

Why did they cut back their LHR ops and sell their slots if they plan to grow internationally?

Are you referring to EWR and BOS? If so, it's because UA was not a strong player in those two markets, and rather than continue to take heavy losses, they put those two stations slots up for silent bid, and BA was the winner.

I fully expect to see UA continue to operate flights to LHR from SFO/LAX/ORD/IAD/JFK.

So are they getting rid of particular routes, or decreasing frequency? Are they surrendering the West coast to LCC's?

I'd like to see HP capture some of their west coast ops.

Isn't the A319 closer in size to the 735, while the A320 is closer to the 733?

I wonder if some of the older 752's will going as well.

The A319 is closer to the 733

The moves by UA seem to be headed on the right track, which is a sign that the airline is taking seriously pressure to emerge from bankruptcy in the VERY near future.

I would also suggest, however, that they close one of their two Calif hubs. Is it truly necessary to maintain hubs at SFO and LAX? UA operates international routes out of SFO as well as many of their UAX operations. I would think they could save even more money by closing their LAX hub, but still maintain a presence there.

The 320 is slightly larger than a 734.

N

God I hope they don't cut mainline flights out of DSM!

I would think they could save even more money by closing their LAX hub


Oh boy. I'd just grab some popcorn, sit back and watch the LAX "Gate War" begin. HP would love to get a hold of some of those gates.

Uh-oh. Could this mean UA is going to get rid of more of their Boeing 777s?

I'm somewhat surprised SEA isn't an official UA hub. They have the entire N terminal which I believe is 20 gates.

I am thinking that 762s will be gone for sure, plus some 733s and 23 735s. 777s will be shifted to more international/interhub routes. 744s are going to some European and some Asian destinations, as well as a few interhub flights.

Alex.

they put those two stations slots up for silent bid, and BA was the winner.


...not exactly what happened, but close enough to give the general gist  

Why dont we all wait to see what happens...So Put away your crystal balls....boys!!

Access-Air

On the SEA comment regarding not being an official hub. It is considered a "major precense city" aka 'mini-hub" and "international gateway".

The N terminal has 16 total gates. Of which 2-3 are US Airways, 2-3 are Alaska/Horizon. And the rest are UA/UAX & Air Canada.

Um, UA makes money on LAX. They fly some flights out of there that no one else flies or have more capacity on them. If they moved out of there, every airline would ramp up like crazy.
They have actually been reluctant in selling the 762s because they own them all outright (same with the 744s) and can use them as leverage. I am guessing they will sell them for a final cash injection to exit 11. They could sell the 733s to WN who needs capacity and would like the fact that those are newer planes than US and some other carriers that might be selling have.

So which stations will see this glorious international expansion?

This isn't good for UA. Hope they can restructure and come out of Chp 11.


AA777jr

This IS good for UA. They're making the right choices.

N

Gigneil,

I agree. This probably ranks up there with one of the better things United has done during their time in bankruptcy, and is very much a good thing. We all knew a fleet reduction was probably going to have to happen, and I'm glad that United is finally getting the ball rolling on this issue. United's strength for the past couple decades has rested in their international operations and on select key routes within the United States. Now, I'm no CEO by any means at all, but if it were up to me I'd take a very aggressive stance in getting United to more international destinations much the same as we are seeing CO do. If United can play on these strongholds, then a fleet reduction pertaining to its smaller 737's makes sense.

While many pessimists may say it's time to run for the hills, this move doesn't really come off as a negative one.

Cheers!

NZblue

Put me in the column of media hype. We know almost 30 737's just were retiring. We know that the 767-200's are going with the PS aircraft on board that's 19. So we are up around 50 total. There are 68 total. There was already word about another round of lease returns next year of 737's.

For those who were asking about capacities of the 737 and the airbus fleets the 737-500's have two different configurations as do the -300's. The ex shuttle planes are 8/102 and 8/120 respectively. The mainline who didn't serve with shuttle are 9/96 and 8/112. The Airbus 320's are configured with 12/126 and the 319's have 8/112.

-m

 

Well, finally something from UA management that makes sense! I have stated from day one that they need to focus on their international markets and drop the domestic ones that they do not have a prayer to be competitive.

It will be interesting to see if UAX does pick up some of these routes. With the right combination of aircraft and costs, there is an opportunity for UAX carriers to come in and feed the mainline (which helps both carriers).

They have paired down their international schedule a great deal and have parked quite a few 747-400s in the desert. This also seems to be good news, as when the 777LR comes into play, United will have little need for the 747-400. Yes, there are some high density routes where the -400 makes sense; however, at the end of the day, the 777-200ER/LR is the right aircraft combination for them (again my opinion).

Good news from UAL!

A very wise move as Intl routes bring in high yield and revenue for UAL especially the Asian flights.

But whilst they talk expansion for Intl long haul flights...why isnt INDIA on the drawing board??? They will make a hell a lot of money flying from their IAD and ORD hubs to DEL and BOM either nonstop or via a Star Alliance hub like FRA or CPH to India !!!

CPH lacks nonstop flights to India so SK could codeshare with UAL on this route.

Many ppl from IAD/BWI area have said that when they fly intl from IAD on KLM-BA-LH-AF etc...they see 100s of Indians lined up for flights via EU-UK bound for India everyday...so with IAD a huge hub for UAL alongwith ORD it would be a wise move.

Someone mentioned them cutting their SFO or LAX hubs. Isn't Virgin America going into SFO? I would expect United to pull back some of the shorter trip domestic feed they have into SFO, or have more of it go UAX.
IMO the greater focus on international is a good solution for now. But I also feel that it is only a matter of time that the so called LCC's are going to expand into international routes. After all, it was only 10-20 years ago that the "LCC" was just a niche carrier, flying a few routes here and there. Now they are the "new" domestic carrier, with the only true differentiation between them and the legacy carriers are that LCC have lower labor costs. Granted, over time, that "labor cost" will continue to rise, as it did at the legacy carriers, and we'll probably see the next generation of LCC's rise, with lower costs than today's LCC. Kind of a cyclical pattern.
Does that sound crazy? Very speculative...

A brave decision on UA's part. Let's hope it pays off.

The following UA 737-522s are earmarked for AR:

N939UA - 06/05
N940UA - 07/05
N947UA - 08/05
N949UA - 09/05
N950UA - XX/05
N952UA - XX/04
N954UA - XX/04

...and there will probably be others...

Regards,

ZXV

P.S. Were they able to sell those 777s to RG?

I wonder how many markets can say goodbye to mainline now? And on that note, are they still getting their EMB-170's ? I hope maybe we can get that in GRR, especially if they do away with the 735's.

~ Andrew Grayson

They have paired down their international schedule a great deal and have parked quite a few 747-400s in the desert. This also seems to be good news, as when the 777LR comes into play, United will have little need for the 747-400. Yes, there are some high density routes where the -400 makes sense; however, at the end of the day, the 777-200ER/LR is the right aircraft combination for them (again my opinion).

Umm...UA has no 777LRs on order, and has no plans to order any. With around 50 747s and some options remaining (to my knowledge), most of which are owned by UA, it would make no sense to buy 772LRs at this point. There aren't enough markets to justify the cost of the aircraft. UA should not be purchasing ANY aircraft for a few years at least.

More and more 744's have been coming out of the desert to serve these new int'l routes, so UA is definately being proactive (in the fleet department anyway).

I wonder how many markets can say goodbye to mainline now? And on that note, are they still getting their EMB-170's ? I hope maybe we can get that in GRR, especially if they do away with the 735's.

Two of 22 E170s have been delivered to Republic for UAX so far, and they still have 23 options. I'm thinking we'll see more of those options firmed up in the coming months.

744s are not going. The planes to NRT, SYD, BKK, SIN and other Asian/European destinations are going out full. 772LR is not on order either.

Alex.

I presume most of the capacity is going to be to Mexico and the Caribbean rather than the glorified transatlantic or transpacific flights. Caribbean yields are pretty good for the length of flights because there is not as much LCC competition, but there is some. On their website they have the following destinations listed that are all new:

Denver: Cancun, Puerto Vallarta, Cabo San Lucas, Ixtapa
Chicago: Cozumel, San Jose, Costa Rica, Aruba, Grand Cayman, Montego Bay, Punta Cana, St. Maarten
San Fancisco: Cancun, Puerto Vallarta, Cabo San Lucas
Washington Dulles: Cancun, Grand Cayman
Los Angeles: Ixtapa

I don't know how many of them are official, although I know most of them have already been loaded into the system. This number of routes is significant and probably will comprise most of the increase, however Nagoya and a few others could also factor in.

Though it pains me to see 68 jets being cut from the fleet, it is definitely true this will help them out....as for them cutting services to their LAX hub...why? LAX is a huge city, lots of demand on a route to that big of a city...I would think UA is going to preserve their LAX hubs...maybe DEN could use some cuts?

"Though it pains me to see 68 jets being cut from the fleet, it is definitely true this will help them out.... "

Doubtful...most of these mainline cuts will be likely replaced by regional jets. This will helpe UA a minimal amount in the short run, and they'll be saddled with costly RJs with high unite costs like everyone else.

Though it pains me to see 68 jets being cut from the fleet, it is definitely true this will help them out....as for them cutting services to their LAX hub...why?

There is always SFO to rely on for a hub. To me, it makes no sense to have a hub at both LAX and SFO.

Its good to see that UA is pulling its head out of the sand and actually using some brains. This is a sign that they'll do just fine beyond Summer 2005. Now I have more confidence in them than I had before. Hopefully this will pay off in the long run.

But then again, it might work AND it may not work....you never know....

"Doubtful...most of these mainline cuts will be likely replaced by regional jets. This will helpe UA a minimal amount in the short run, and they'll be saddled with costly RJs with high unite costs like everyone else."

They are cutting flights and aircraft, not replacing them with RJ's, hence "fleet reduction" not "fleet reconfiguration"

I don't see them doing major cuts in any of the hubs. They said that they're committed to all 5. Plus, DEN is our most profitable one anyway.

Alex.

I think the 737-300/500 and 767-200 fleet are those that will be phased out as part of the 68-plane reduction.

UA will likely use a combination of 757-200 and 767-300 planes on transcon routes, especially the still-lucrative SFO/LAX to JFK service. (However, don't be surprised that UA pulls some 777-200A's from transatlantic service, reconfigure them, and assign them to the SFO/LAX to JFK route in the next few years.)

Folks,
This is nothing new. If you've followed the announcements over the past few months, all this announcement is doing is putting together all of the information. We knew the 737-500s were being retired. We knew the 767-200s were, too, with the start of PS. There's almost all of the 68 aircraft retirements. The rest will come from the rejection of leases on certain aircraft (most likely a few 777s and 747s). This will still leave UAL with plenty of each. The press release clearly said that most domestic markets will receive minimal service cuts. So this might mean in markets where there is hourly service (ORD-EWR/LGA/BOS, etc.), there could be 1 round-trip per day cut. Possibly some of the non-money-makers switched to UAX to remain presence.
Someone mentioned the high cost of the RJs, but remember UAX operates for UAL on a fee-per-departure basis. This is a good setup for UAL.
"Right-sizing" is something Tilton has been preaching for some time now. It's encouraging to see him taking action. I think the business plan will look quite viable now, with Ted/PS/mainline/UAX and a focus on international. However, to be 100% competitive, we will need to revamp the international service levels including a lie-flat business class seat.

Not exactly sure how it is that you come up with only a net decrease of 3% of capacity when you retire 13% of your fleet. Is sounds like, as George W. Bush would say, fuzzy math.

Whoever brought in the idea of 777LRs to replace 744s: That utter nonsense.

Not only that its far from anything the airline would plan. The 772LR is the most expensive aircraft per seat that can be bought on the market, and its extra range isn´t needed by UA as well. No bank in this world would finance a idea stupid as this.

The best idea for UA is to keep the 744s they need until they´re due for retirement. Thats not this decade, and for some its even after 2020!

That is unless they win all jackpots over the next 5 years or Bill Gates comes in as a sponsor.

Not much of a change will come domestically.

Frequencies will be maintained through increased UAX 70-seater usage, and three glorious words for the mainline:

Increased Aircraft Utilization

This should help drive UAL's CASM down.

Not exactly sure how it is that you come up with only a net decrease of 3% of capacity when you retire 13% of your fleet. Is sounds like, as George W. Bush would say, fuzzy math.

Fuzzy math? Airline managers around the world would beg to differ.

Capacity & traffic are measured in terms of ASMs and RPMs, buddy.

Even if you retire 13% of your fleet, if you fly your aircraft more and on longer routes [hint: international expansion usually means better aircraft utilization and longer routes] your ASMs/RPMs will not decrease in proportion.

Think people, think.

It depends on how you define capacity - in this particular case, they are referring to available seat miles (ASMs) or seats times distance. Since international aircraft are in general larger and fly longer routes, each aircraft generates considerably more capacity than, say, a 737-500. Thus, if you're reactivating a small number of 747-400s and retiring a much larger number of 737-500s you can very easily reduce the absolute number of airplanes but have a much smaller impact on capacity on an ASM basis if the remaining aircraft are larger and fly longer routes.

Did they actually give any indication of re-activating any 747's or if it would be the 735's being retired?

"They are cutting flights and aircraft, not replacing them with RJ's, hence "fleet reduction" not "fleet reconfiguration""

"Frequencies will be maintained through increased UAX 70-seater usage, and three glorious words for the mainline:"

I would think UA is going to preserve their LAX hubs...maybe DEN could use some cuts?

Why do you think that?

N

DEN is NOT going to take a cut, the hub is doing very well and making money.

I however looked at the parked plane list and we have NO 747's parked right now. A handful of 37's about six 777's and a few 67's, this is going to be good for UAL.


UAL 777 CONTRAIL

I'm not sure when it happened, but we have seen an upgrade around here in OMA from 73x/319s to a few 75s. We had 757s out of here a year or 2 back (and 727s before that) but this is the first time I have seen the 757s in a while.

Ual777contrail:

"I however looked at the parked plane list and we have NO 747's parked right now."

But what about this photo dated October 2, 2004:

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Photo © Ernie Viskupic

I looked at that pic the other day when it was posted....................first thing my eyes were drawn to was those UA 747's!

What's up with that is right! I believe it's been discussed in numerous threads lately that more and more have been coming back on-line. Let's hope at least a few of those beauties are back soon...................kind of sounds like it.

Few weeks back everyone here talking about the UA 744's in the desert to NWA.........so we know there's been some in the desert for sometime.

2 of UA's 777-200ERs (N207UA, N208UA) will be transferred to RG next month, as PP-VRE and PP-VRF, as part of an order placed by the Brazilian carrier in July. At least that's 2 less parked in the desert...

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Photo © Sam Chui