United Airlines to add slimmer seats, bigger planes and higher fares
United Continental Holdings Inc. on Tuesday outlined plans to boost profitability with another round of cost cuts and efforts to woo back corporate fliers who have deserted the third-largest U.S. airline by traffic.
United aims to lift revenue, improve efficiency and trim expenses by a cumulative $3.1 billion between 2015 and 2018 as part of a broader effort by Chief Executive Oscar Munoz to reshape a company that some analysts have said requires bigger reforms to close its profit gap with rivals.
United, which is the largest airline at Denver International Airport, also said its closely watched average fare metric will be at the higher end of prior guidance in the second quarter, though investors will have to wait until the fourth quarter for an investor day with potentially more wide-ranging moves that analysts said could include changes to its route network and long-term financial goals.
United aims to secure almost half of the financial improvements — some $1.5 billion over the three years — by securing additional revenue and higher fares by better segmenting its passengers according to their willingness to pay. Additional cost-savings will come from efforts such as installing slimmer seats and “upgauging” to increase aircraft capacity, United said.
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