United Airlines plans to shift hub
capacity out of Houston and toward Denver and San Francisco as the carrier
works to regain lost domestic market share.
“The schedule quality we offer
customers has deteriorated over the last five years,” chief revenue officer Jim
Compton said during an investor call held by the carrier Tuesday. “Through
responsible growth we will be able to target capacity positions in our best-performing hubs to reverse that trend.”
United said its
domestic capacity, as measured by the number of available seat miles it flies,
dropped 6% between 2010 and 2015. As a result, the seat share held by United in
its hubs dropped from 36% to 31% during that time period.
United plans to reverse
that trend by adding overall capacity at its hubs this year and by making
strategic shifts. Houston, which has been weakened over the past couple of years
by the soft energy market, is a logical market to shift out capacity.
Compton’s comments came as United
used the investor call to outline strategic initiatives that it says will lead
to $3.1 billion in value by 2018. Among other steps, the airline expects to
regain business travelers by improving timeliness.
As far as product offerings, the
airline expects to increase Economy Plus seats by approximately 20% by 2018 and
to increase front-cabin seating by approximately 30%.
The introduction of no-frills
fares, in which seat selection and ticket changes aren’t offered, is expected
to bring $150 million by 2018. Those fares are to be introduced later this
year.