No more Asia cutbacks in the works, United says

By Desmond Hutton
Bloomberg News Service

TOKYO — UAL Corp.'s United Airlines said it intends to retain its flight schedule and won't reduce capacity on Asian routes as it reorganizes its business to secure loan guarantees to stave off bankruptcy.

The world's second-largest carrier said last week that it needs a union agreement by mid-September to cut wages to help win a $1.8 billion federal loan guarantee and pay $875 million of debt this year. United said that without the loan, it may file for Chapter 11 bankruptcy protection.

"So far there's no need to cut back (capacity) any further," after already reducing the number of available seats on Asian routes by a fifth after Sept. 11, said Mark Schwab, United's vice president for North Pacific operations.

"The Pacific business is doing relatively well compared with the rest of the world."

Japan, which makes up more than half United's Asian business, is the only market in the world where capacity is now greater than before the September attacks. Asia-Pacific routes overall contribute as much as a quarter of United's revenue, said company spokesman Soichi Hamaoka.

The number of U.S. travelers to Japan and to other Asian destinations via Japan has grown since before the attacks, the carrier said.

United operates 15 flights a day to Asia-Pacific destinations. Passenger volume in Asia rose 1.7 percent to 140.6 million from the year-earlier period, according to Airports Council International.