United's low-cost operation moving forward as it shrinks

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United's low-cost operation moving forward as it shrinks
Dateline:  Tuesday June 17, 2003

United Airlines continues to make progress toward launching its proposed
low-cost carrier even as it scales back expectations for the initiative,
which was to have been the centerpiece of its restructured domestic network
strategy.
During a management briefing last week, LCC leader Sean Donahue said he
expects to present a business plan to senior leadership for the unit within
the next couple of weeks. It will include recommendations for the type and
number of aircraft to be used, markets to be served, product offering,
schedules and a timetable for launch. At the same time, Donohue
acknowledged that the size and scope of the low-cost operation has changed
significantly compared to the role envisioned in United's Plan for
Transformation presented to creditors at the end of Jan. That plan called
for the LCC to assume as much as 35% of United's domestic seat capacity
operating a fleet of 134 aircraft and flying to 37 of UA's 81 domestic
cities. A United spokesperson told ATWOnline that the company has said
publicly a "number of times" that the LCC likely will be smaller than
originally anticipated. Donahue also said the operation will be
significantly more cost effective than the defunct Shuttle by United
product and will have costs lower than some of the budget airlines
currently operating.--Perry Flint


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