United sets out priorities; revises Q” PRASM

Dino D'Amore
By Dino D'Amore June 23, 2016 13:41

United sets out priorities; revises Q” PRASM

In an investors’ call, Oscar Munoz, President and CEO, of United Continental, with Chief Revenue Officer Jim Compton update listeners upon the initiatives taken by the airline to improve the company’s financial performance. The airline group also revised its second-quarter consolidated passenger unit revenue (PRASM) in this year (2QFY16) to decline 6.5-7.5%, rather than a decline in the 6.5-8.5% range.

The airline management set out their priorities for rebuilding trust with the airline’s employees and customers as well as for maintaining reliable operations while driving efficiency. They introduced three new initiatives they intends to deploy in order to achieve value. These are: driving strong operational performance, making commercial enhancement and implementing cost structure improvements.

The airline predicts it can improve operational performance by $300 million by 2018, which will come from running a more reliable airline by reducing associated costs linked with cancellations and delays.

Management hopes that it can make $1.5 billion by 2018 through increased customer segmentation by the introduction of new products such as entry level fares and other bundled products. United’s MileagePlus program will also be revitalise to generate around $300 million.

United also plans to upgauge its aircraft and install slim-line seats, which it says will results in a $800 million benefit by 2018, further boosted by better cost management.

Dino D'Amore
By Dino D'Amore June 23, 2016 13:41