United Airlines may reduce domestic flight capacity this year because of weak domestic revenue.
The carrier also acknowledged Wednesday that revenues have suffered in Denver as low- cost carriers Southwest Airlines and Frontier Airlines step up their competition.
“Denver was uniquely punished,” John Tague, United’s chief revenue officer, said in a conference call to announce United’s first- quarter earnings. “Clearly, we’re under pressure in Denver, and we expect that to continue.”
United parent UAL Corp. lost $152 million, or $1.32 a share, in the first quarter, which was worse than analysts expected.
The company’s struggles at Denver International Airport could make the airport a target if United reduces capacity.
“That would be great news,” Frontier spokesman Joe Hodas said.
Tague said customers won’t notice capacity reductions, which would be “very moderate, around the edges.” United could, for example, replace more of its flights with United Express regional flights.
Tague said Denver was one of the airline’s best hubs 12 months ago.
“Clearly, the historical fare environment was more profitable prior to this competition,” he said.
United chief executive Glenn Tilton nonetheless called Denver an important hub, adding, “We have every intention of defending it.”
While international demand is strong, Tilton acknowledged that the airline added too much domestic capacity in the first quarter.
United’s first-quarter revenues were down 2.1 percent from a year ago, in part because of a change in how United accounts for frequent- flier-program revenue.
United also said it has reduced its general and administrative head count by 1,200.
Staff writer Kelly Yamanouchi can be reached at 303-954-1488 or kyamanouchi@denverpost.com.
