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07-23-2006, 01:26 AM

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Gordon C

Gets Weekends Off

Joined APC: Feb 2005

Position: 737 Capt

Posts: 219

UAL's Tilton disses LCCs

United chief sees edge in long haul over discounters
Only major carriers can offer worldwide service, Tilton says

By Ameet Sachdev
Tribune staff reporter
Published July 21, 2006

Low-cost airlines will "never" fly long-distance routes to China nor short hops to smaller cities because those flights don't fit with their economic model, said United Airlines Chief Executive Glenn Tilton.

The only domestic airlines that can offer such comprehensive service, Tilton said in a speech at a Chicago aviation conference Thursday, are the majors, such as United, American Airlines and Delta Air Lines.

"The simple Southwest [Airlines] model, although compelling from a cost perspective, will never serve Shanghai nor will it ever serve Springfield, Ill.," he said, referring to the leader of the low-cost carriers.

Southwest and other discount airlines use a single-type of plane to offer frequent flights to smaller airports in major cities, while United and other large carriers generally fly around the world using multiple types of planes.

Some in the aviation industry beg to differ with Tilton. They cite examples of low-cost carriers in other countries eyeing international routes.

Virgin Blue Airlines, partly owned by English billionaire Richard Branson, recently secured permission from the Australian government to introduce flights from Sydney to Los Angeles. The airline has said it could be ready to offer the flight by next year.

Australia's national carrier, Qantas, could be vulnerable if that occurs. The L.A.-Sydney route reportedly accounts for as much as 20 percent of the airline's profit.

On the heavily traveled New York-London route, two new airlines, Maxjet Airways and Eos Airlines, provide all-business-class flights at lower prices than British Airways.

"I think it's very misleading for anyone to assume that United has an advantage on long-haul routes over low-cost carriers," said Matthew Andersson, senior aviation consultant at CRA International in Chicago. "Their long-haul routes are not immune from more competition."

Southwest has said it may expand to international routes in a few years. The Dallas-based carrier gained knowledge about long-haul flights through a partnership with ATA Airlines, cemented in a 2004 deal to acquire gates at Midway Airport. ATA flies to Hawaii and Mexico.

Long-haul flights are more of a possibility for low-cost carriers thanks to new, more fuel-efficient aircraft expected to be arriving soon.

The Boeing 787 Dreamliner, which is scheduled to enter service in 2008, promises to fly across the oceans using 20 percent less fuel than similar midsize planes.

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