Travel News: United’s Capacity Growth Plan Bears Fruit: Business Travel News (Reblog)

“United Airlines enjoyed an “I told you so” moment with its fourth-quarter revenue results, as capacity growth plans that rattled analysts early last year appeared to pay off.

United in prior years had abandoned regional service from its hubs in favor of taking on American Airlines and Delta on their key routes. The carrier’s more recent strategy has grown those routes. United introduced 93 routes in 2018, more than any other U.S. airline, and capacity for the full year rose 4.9 percent year over year. Those plans had concerned investors, worrying that they would lead to lower fares. However, United’s traffic growth, at 6.4 percent, outpaced capacity growth and did not dilute unit revenue or yield growth. “Not all capacity growth is created equal, and I think we proved that this year,” CEO Oscar Munoz said on United’s earnings call.

Corporate business growth contributed. Chief commercial officer and EVP Andrew Nocella said corporate revenue growth outpaced the 11 percent overall revenue growth in the fourth quarter. Despite the volatile stock market and the ongoing government shutdown, corporate demand has started off strong this year, as well, said United president Scott Kirby.”

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