NYTimes.com Article: Memo Pad: Three Airlines Join United Express Unit

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Memo Pad: Three Airlines Join United Express Unit

March 9, 2004
 JOE SHARKEY





Three Airlines Join

United Express Unit

United Airlines said yesterday that three small regional
carriers - Chautauqua Airlines, Republic Airlines and
Shuttle America - have joined its United Express unit. The
announcement was seen as further evidence that regional
carriers are evolving sharply away from being independent
airlines and toward mostly providing capacity under
contract to larger airlines.

Doug Hacker, United's executive vice president for
strategy, said that the agreements would enhance United
Express's ability to provide competitive low-fare service
to smaller markets with connections from hubs like
Washington Dulles and Chicago O'Hare. In recent years,
small regional carriers have increasingly felt pressure to
shift operations toward becoming what Michael Boyd, the
airline consultant, calls "small-jet providers" for bigger
airlines eager to fill gaps on routes and compete more
intensely with national low-cost carriers.

Mr. Boyd said yesterday that United's agreement with the
three carriers was also a move to replace capacity that
would be lost if Atlantic Coast Airlines - which is chafing
under financial terms it dislikes as part of United's
bankruptcy proceedings - succeeds in withdrawing from a
partnership in which it provides regional service for
United Express. "Losing Atlantic Coast would mean they'll
lose about 85 airplanes; they've got to fill those in
somewhere," Mr. Boyd said of United, which also has
contracts with regional carriers Mesa Air, SkyWest and Air
Wisconsin.

Atlantic Coast, which also provides small-jet service for
Delta Connection, has said that it expects that its
longstanding relationship with United will end this year.
Atlantic Coast has said it intends later this year to
become a low-fare airline called Independence Air, offering
350 daily flights from Dulles.

Domestic Hotel Demand May Increase

After three years of
contraction, demand for domestic hotel rooms will increase
4.5 percent this year, PricewaterhouseCoopers said. The
strongest performance is being seen at the top of the
scale. According to the PricewaterhouseCoopers forecast,
so-called upper-upscale luxury hotels will see a 3.9
percent growth in occupancy and a 1.9 percent growth in
average room rates, while upscale hotels will see a 4.5
percent occupancy rise and a 6.7 percent rise in room
rates. JOE SHARKEY

http://www.nytimes.com/2004/03/09/business/09memo.html?ex=1079840458&ei=1&en=b74fe38e5e59926a


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