United Airlines Holdings Inc. (NASDAQ:UAL) Expects Improvement in Capacity and Drops Costs

United Airlines Holdings Inc. (NASDAQ:UAL)  moved down in early trading session on Thursday that it expects a little improvement in current-quarter expenditures and capacity as the airline navigates manpower constraints and aircraft limitations to meet brisk demand.

Major US airlines forecast travel demand to remain strong in the second half of the year, but a lack of crew and aircraft has pushed them to curtail flights and make costly staffing changes to avoid cancellations and delays. However, in a regulatory filing on Wednesday, United stated that it had observed “increasing operational dependability” into 2022.

Excluding fuel, the airline anticipates third-quarter Cost Per Available Seat Mile (CASM) to be up 16% from the same time in 2019, a little improvement from its earlier prediction of 16%-17%.

According to the Chicago-based airline, third-quarter capacity will be down 10% to 11% from pre-pandemic levels, compared to its previous prediction of 11%.

On the other hand, the firm recently reported that it aims to discontinue operations to New York’s John F. Kennedy Airport (JFK) in October if the Federal Aviation Administration (FAA) does not permit the airline extra flights.

According to an email sent to workers by United last week and seen by Reuters, Chief Executive Scott Kirby urged Acting FAA Administrator Billy Nolen to expand capacity at JFK. After restarting service in 2021, United will only fly twice daily to San Francisco and Los Angeles from JFK, the busiest airport in the New York region.

United said in email that if they are not able to get additional allocations for multiple seasons, they will need to suspend service at JFK, effective at the end of October.

In a statement issued on Tuesday, the FAA stated that “To estimate how modifications may effect flights at surrounding airports, airspace capacity and runway capacity must be considered. Any additional slots at JFK would be awarded in accordance with the FAA’s well-established process in order to boost competitiveness.”

United said it has been working with the FAA and the market at JFK to pursue additional slots – takeoff and landing authorizations – “so that we can grow to be more competitive,” and that without permanent slots, it cannot serve JFK “effectively compared to the larger schedules and more attractive flight times flown by our competitors” like JetBlue Airways and American Airlines.

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