United Airlines aims for $2 billion in cost savings

21 November 2013

by: Joshua Freed (Associated Press)

United Airlines said that it will cut costs, overhaul its website, and shift flying from Asia to Europe as it aims to keep shareholders happy.

United didn't announce any furloughs as part of the cost-cutting measures outlined on Tuesday in a presentation to investors. A spokeswoman declined to comment on whether its plans include furloughs.

United says it is aiming to burn less fuel, make workers more productive, and improve its maintenance processes. It has been working with its mechanics' union to revamp which maintenance jobs are done by the 2,000 workers at its San Francisco maintenance center, said Greg Hart, who runs the airline's technical operations.

United said it will overhaul its United.com website in phases starting next year. The airline has been struggling to run smoothly and produce consistent profits since merging with Continental in 2010.

One of United's goals is to boost the revenue it gets from add-ons such as meals, baggage, and admission to its lounges by $700 million, to $3.5 billion in 2017. It didn't lay out specific new fees or plans in this area, but executives said options include bundling together fees. United already has several like that, such as $349 for a “subscription'' for a year's worth of checked baggage.

United is also adjusting where it flies. In March it will stop flying between Seattle and Tokyo under intense pressure from Delta Air Lines Inc. United will instead add a second daily flight to Tokyo from its biggest hub, Houston.

United partner All Nippon Airways still flies Seattle-Tokyo.

Delta is United's archrival on Asia flying. It has two daily flights from Seattle to Tokyo, including a recently-added flight to Haneda airport, which is popular with business travelers because it is closer to Tokyo's downtown.

United is also dropping some flights within Asia, including Tokyo-to-Bangkok, and using a smaller plane for Tokyo-to-Seoul. It will still connect passengers on those routes through partner ANA.