Shuttle by United, later the United Shuttle, was not as unsuccessful as many believe. When started up, it was originally intended to answer Southwest's expansion in California. While it did not surpass Southwest in that type of passenger, United found an unintended benefit - the Shuttle became a low cost feeder to international flights out of LAX
When business travel was booming, United could set high fares for city pairs such as LAS
, or SAC
. Pax from LAS
would be fed into LAX
via the low cost shuttle, thus increasing profitability across the line.
The Shuttle was discontinued in response to the drastic downturn in business travel. At some point load factors are going to drop enough where it doesn't make sense to market a separate airline within an airline. Additionally, if you market certain flights as "Shuttle" with dedicated aircraft types, you lose flexibility in positioning. For example, now as a mainline, UA
is positioning 767's between LAX
to where they are needed.
Don't get me wrong, I absolutely hated the Shuttle when it started up, but while United doesn't market these flights as shuttle flights, many of the short-hauls are still operated as shuttles (e.g. plastic cups in first class). Before Shuttle by United you could actually get snack service in First on the LAX
flights - it was quick, but it was a nice treat on a Friday night after a long work week.
United has the planes, and they have the flexibility to set new union contracts. Setting up a low cost carrier is a must to capture that market until business travel picks up again. I will however, try to avoid it as much as I can.