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United hopes this time, low-cost carrier will fly

Tampa will be among the first destinations for the new airline. A similar venture in the 1990s folded in the face of competition.

By STEVE HUETTEL
Published September 18, 2003

Tampa Bay area travelers will be among the first to fly a low-cost carrier United Airlines will launch early next year.

United said Wednesday its new all-coach carrier, not yet named, will initially fly nonstop from its Denver hub to seven cities, including Tampa.

The nation's second-largest airline, which is still reorganizing its finances in bankruptcy court, hopes the low-cost arm will help it compete with discount carriers such as Southwest, JetBlue and Frontier.

"Customers want low fares, low fares, low fares, and they're not willing to pay extra for a free meal," said Sean Donohue, vice president for the new operation.

The new airline will begin flying in February with four Airbus A320 jets. It will mostly replace regular United flights, but with a few additional flights and some extra seats, said spokesman Jason Schechter. The airline plans to expand nationwide and grow to 40 jets by year end.

Tickets will go on sale in November, Schechter said. Details such as fares, the number of flights and starting dates for individual routes weren't released Wednesday.

The airline will have its own name and "brand characteristics," he said. Customers will be able to get benefits of connections to United's worldwide network, frequent flier miles and technology such as checkin on home personal computers. Delta, the nation's third-largest carrier, launched its low-fare Song Airlines earlier this year.

Since filing for Chapter 11 bankruptcy last year, United has restructured labor agreements and aircraft leases. The airline will save about $5-billion in annual costs by 2005, half of that in labor expenses.

United says the new carrier will have lower costs than the parent airline by using a single model aircraft and getting more use out of the planes each day.

But many aviation experts are skeptical. United's pilots refused to accept a lower pay scale for the low-cost carrier, and other workers also will get the same pay as fellow United employees.

United tried a low-cost carrier called Shuttle by United in the 1990s but folded it in the face of competition from Southwest.

"The problem is, they've been there and done that," said aviation consultant Michael Boyd, who owns the Boyd Group in Evergreen, Colo. "It's like Ford saying they've got this great new model called the Edsel."

- Steve Huettel can be reached at huettel@sptimes.com or 813 226-3384.

[Last modified September 18, 2003, 02:03:00]

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