United Airlines Holdings Inc (NASDAQ:UAL) Will Discontinue Operations to New York Airport; As See Improvement in Results

United Airlines Holdings Inc (NASDAQ:UAL) moved down 0.36% in pre trading session on Wednesday as after it declared that it anticipates a little improvement in current-quarter expenses and capacity as it battles labor 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%.

United Airlines announced on Tuesday that it will 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.

“If we are unable to get extra allocations for many seasons, we will be forced to cease operations at JFK beginning at the end of October,” United wrote in an email.

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 had been working to pursue additional slots – which are takeoff and landing authorizations – through the FAA and market at JFK “so that we can grow to be more competitive” and said 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.

United argues there is room to grow at JFK, the 13th-busiest U.S. airport, because the FAA and the Port Authority since 2008 have made significant infrastructure investments including “the widening of runways, construction of multi-entrance taxiways, and the creation of aligned high-speed turnoffs.”

In June, the FAA approved United’s request to temporarily cut about 50 daily summer departures from its Newark airport hub to address congestion, representing 12% of United’s 425 daily flights at Newark. United is the dominant carrier at Newark, operating 69% of flights.

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