United Continental Holdings Inc. on Tuesday said it would move a
fleet of 15 planes used on luxury flights to the West Coast to its
Newark, N.J., hub from New York's John F. Kennedy International
Airport, amid greater competition on the high-end routes.
United said its shift to Newark is aimed at providing better
service and shoring up what has been a money-losing business for
the past seven years. The biggest problem: United was putting its
p.s., for premium service, Boeing 757s into an airport where it
offered no connections. The company has no other flights to JFK,
although it does operate 37 daily flights from New York's LaGuardia
Airport.
So on Oct. 25, United will cease operations at JFK and move
those 15 planes to Newark, where it offers nearly 500 daily
departures. United also said it would move eight or more 757s
currently flying across the Atlantic to the domestic p.s. service,
enabling it to boost its number of flatbed seats on the two routes
by 44% year over year. The Chicago-based airline said it would
offer 16 daily flights to San Francisco and 12 to Los Angeles by
November, with higher daily frequencies in the peak summer months
by next year.
All of the existing flights from Newark to the two West Coast
cities will be transitioned to p.s. service, with just 142 seats,
including 28 lie-flat beds in its BusinessFirst cabins. This will
give United's highest-paying passengers the opportunity to have a
flatbed experience across the U.S. and then onto international
connections across the Atlantic and Pacific. The switch also means
United will increase the number of widebody Boeing 767s on European
flights, including those from Newark to Barcelona, Madrid, Berlin
and Hamburg.
United in 2005 pioneered a plan to use 757s with fewer but more
luxurious seats to ply routes from New York to San Francisco and
Los Angeles. In recent years, other airlines have made similar
moves. JetBlue Airways Corp. last summer launched Mint, its
premium-cabin service with lie-flat beds and suites, on some Airbus
A321 planes flying to Los Angeles and San Francisco from JetBlue's
JFK hub. Earlier last year, American Airlines Group Inc.
substituted A321s on those routes from JFK, with just 102 seats
each, including a total 30 lie-flat beds in first class and
business class.
On Tuesday, United said it reached a deal for Delta Air Lines
Inc. to acquire United's JFK slots, and United will acquire slots
from Delta at Newark. The transactions are subject to regulatory
approval and United declined to discuss the terms. Delta wasn't
immediately available for comment.
United employs about 200 airport operations workers and 70
mechanics at JFK. While there could be some job reductions, United
said it would work with unions to mitigate the impact and try to
allow some workers to transfer to other positions.
United's launch of p.s. in 2005 was an audacious move as it was
mired in bankruptcy-court proceedings. But in bankruptcy, the
company had the chance to reject leases and return planes to their
owners without financial penalty. It decided to put 757s on the
routes because they are cheaper to operate.
It also yanked about 70 seats from the planes, which drove up
the seat cost on the assumption that revenue per seat also would go
up. That appeared to work for a while, but the company said p.s. in
aggregate over the past seven years failed to make a profit.
It is hoping the myriad connections at Newark will remedy
that.
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