Nov. 19, 2013
/PRNewswire/ -- United Airlines is revealing plans today at its Investor Day conference in
New York City
to reduce costs, increase revenue and enhance profitability while delivering competitive reliability and excellent customer service.
"We are working together to build on United's core strengths and deliver excellent long-term results for our investors," said
, chairman, president and chief executive officer. "We are committed to achieving sufficient and sustainable profitability that will benefit all of our stakeholders."
United's 2013 Investor Day will begin today at
8:30 a.m. ET
. A live, listen-only webcast of the presentations and question and answer session will be available at
. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for a limited time.
Improve financial performance
The company has launched initiatives to reduce costs by
annually. The plan includes reducing fuel consumption, increasing productivity, reducing sourcing costs, improving maintenance processes and inventory procedures, and optimizing distribution methods. United aims to increase pre-tax earnings by two to four times the current level over the next four years and to generate sufficient cash to begin allocating capital to shareholders by 2015. This is in addition to the company's existing goal of achieving a 10 percent return on invested capital.
United plans to increase ancillary revenue by approximately
, with a goal of generating more than
in ancillary revenue by 2017. The company expects to achieve this growth by giving customers new options, optimizing pricing on existing products and expanding availability of ancillary products through additional distribution channels.
"Today we are announcing plans to significantly improve our efficiency, profitability and capital structure, making United a stronger, more investable business," said
, executive vice president and chief financial officer.
Further optimize the network
United is building on its strengths by leveraging its trans-Pacific and trans-Atlantic joint ventures to further develop its unmatched route network. The company expects to improve results on its trans-Pacific network by redeploying certain widebody aircraft, including beginning a second daily
service, subject to government approval, and eliminating
flying. United also will eliminate
747 service and down-gauge
flights, reallocating those long-haul aircraft to more profitable routes. ANA, United's trans-Pacific joint venture partner, will provide the appropriate amount of the beyond-
connectivity for United's trans-Pacific flights.
The company will use its highly efficient 787 Dreamliner aircraft to provide service to new markets, including previously announced service from
, the premier Pacific gateway, to
, subject to government approval. This is in addition to new 777 service effective
. The company will capitalize on its ability to serve growing secondary markets in
the United States
, similar to its successful strategy serving secondary European markets non-stop from its East Coast hubs.
Using aircraft previously operated on intra-
routes, United is also building its trans-Atlantic flying with new service from
and new seasonal routes from
. The new
service is subject to government approval. Additionally, United will introduce all-widebody service to the Newark-London Heathrow route during the summer peak season, nearly doubling the number of flat-bed seats on each upgraded flight.
Introduce next phase e-commerce strategy
The company is launching the next phase of its successful e-commerce strategy, which provides an aligned set of tools that better address the needs of today's mobile traveler. In addition to the new mobile app launched last week, United today previewed the new united.com. These enhancements will build on the company's strong e-commerce platforms by providing clear, customized shopping and booking experiences, expanding opportunities for ancillary product and service sales and increasing ticket penetration through direct digital channels.