United reveal cost-cutting strategy

United Airlines

United Airlines has revealed an ambitious strategy to boost revenue, enhance profitability and reduce overall costs by US$2 billion annually.

United has launched a range of initiatives in order to reduce fuel consumption and sourcing costs, while optimising maintenance processes, inventory procedures and distribution methods.

The airline aims to increase pre-tax earnings by two to four times the current levels over the next four years in order to generate sufficient cash to begin allocating capital to shareholders by 2015.

This is in addition to the company’s existing goal of adding a 10 percent return on invested capital.

“We are committed to achieving sufficient and sustainable profitability that will benefit all of our stakeholders,” United Airlines chairman, president and chief executive Jeff Smisek said.

United has a goal of producing more than US$3.5 billion in ancillary revenue by 2017.

The airline expects to improve results on its trans-Pacific network by redeploying widebody aircraft, including the commencement of a second daily Houston-Tokyo service, eliminating Seattle-Tokyo. 

United will also eliminate its Tokyo-Bangkok service and down-gauge Tokyo-Seoul flights.

United Airlines also previewed its new website, expanding opportunities for ancillary product and service sales, while increasing ticket penetration through direct digital channels.

Source = United Airlines
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