United looks West

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http://www.suntimes.com/output/business/cst-fin-united29.html

United turns toward the sun
July 29, 2006
BY DAVE CARPENTER

Shifting its focus increasingly toward more lucrative routes across the Pac=
ific, United Airlines announced on Friday that it will add 40 weekly flight=
s to Asia over the next nine months and no longer will fly from New York to=
 London and Tokyo.

United also plans to add more cargo capacity as it seeks to strengthen its =
bottom line in the face of record fuel prices that have slowed its recovery=
 after a three-year bankruptcy restructuring.

The nation's second-largest carrier agreed to sell its New York-London rout=
e authority to No. 3 Delta Air Lines Inc. for $21 million, dropping a hotly=
 contested but unprofitable route to focus more on trans-Pacific flights wh=
ere its broad international network gives it an advantage.

It said it will move its Tokyo service from New York's JFK Airport to Washi=
ngton Dulles International.

The schedule changes make sense for United because of strong business trave=
l demand on routes to Asia and because of the premium prices that can be ch=
arged for long international flights, said John Pincavage, an independent a=
irline consultant.

As for abandoning JFK for overseas flights, he said: ''You've got to play f=
rom your strength, and New York isn't one of their strengths as an internat=
ional source of traffic.''

The airlines' hubs are Chicago's O'Hare, Dulles and airports in Denver, Los=
 Angeles and San Francisco.

''As we improve our financial performance, we must make certain that we tak=
e full advantage of our network strength and fly routes that provide the be=
st revenue opportunities for United and the greatest benefits to our custom=
ers,'' Chief Revenue Officer John Tague said.

In addition to flights between Tokyo's Narita International Airport and Was=
hington Dulles, the schedule changes include the reinstatement of United's =
daily San Francisco-Taipei flights, expansion of its San Francisco-Seoul se=
rvice from seasonal to year-round, and the addition of three more weekly fl=
ights between San Francisco and Hong Kong.

United plans to discontinue flights from JFK to London Heathrow at the end =
of October pending regulatory approval of the sale of its New York-London r=
ights to Delta, which is paying United $13 million at closing and $2 millio=
n a year for four years.

''JFK-Heathrow has not performed well for us, and because of that we can't =
justify the expense of maintaining the route, especially when we have oppor=
tunities to realize better returns by using our assets in other markets,'' =
United spokeswoman Jean Medina said.

United will still fly to London from Dulles, Los Angeles, O'Hare and San Fr=
ancisco.

United has been adding international flights and cutting back on domestic f=
lights in recent years, citing increased demand and greater profitability. =
It doubled its capacity to Asia during its bankruptcy makeover, which ended=
 in February, reflecting an intensifying competition among U.S. carriers to=
 serve the burgeoning market in China and elsewhere in Asia.

AP

Copyright =A9 The Sun-Times Company

All rights reserved. This material may not be published, broadcast, rewritt=
en, or redistributed.

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