United Airlines will slash yearly expenses $2 billion, and take bigger planes from its Asia flights to increase revenue Bloomberg Businessweek reported Tuesday.
"We're very confident we can deliver," Jeff Smisek United Airlines chief executive officer said today at the presentation, the first as a combined airline. "We believe that we can deliver for you, our investors, multiples of our current earnings. We're very focused on that over the four-year period and we're focused on generating free cash flow so we can do what we should do, which is return cash to our shareholders."
The airline who merged with Continental Airlines in 2010 is also re-locating many of bigger airplaces from its base in Tokyo, Japan. It is also removing its flight from Seattle to Tokyo so Delta can construct an Asian hub from the Seattle-Tacoma airport.
"We are very positive on these stated goals, but where UAL has run into problems over the past two years is in execution of its stated plans," James Corridore, an analyst with Standard & Poor's Capital IQ, wrote in a note to clients Tuesday Bloomberg Businessweek reported. "We would like to see some traction on these plans."
United will also start another flight during the day from its Houston base to Tokyo, Japan, and a route from San Francisco to Chengdu, China, and Taipei, Tawain in 2014.
There will also be flights from Houston to Munich, Germany, and during the summer: flights from Madrid to Edinburgh, Scotland.
United is also decreasing its 50-seat regional jet fleet for bigger planes with 76 seats.
"The marriage of big data and this mobile platform ... becomes incredibly powerful," Scott Wilson, United's vice president of e-commerce and merchandising told Bloomberg Businessweek. "The airline has squeezed 30 percent more revenue this year from 2012 through "dynamic pricing" of its Economy Plus section, which has more legroom, on a flight-by-flight basis. United can gain about 20 percent in sales next year on that seat pricing," Wilson said.
