United to Cut Capacity in Early 2011

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United announced plans to cut capacity by 1.9 percent in early 2011, the airline's first network adjustment since officially merging with Continental.

According to Bloomberg News, "The carrier will trim first-quarter capacity 1.8 percent at Chicago O’Hare, the second-busiest U.S. airport, 5.6 percent at Denver, 9.9 percent at Phoenix, 6.9 percent at Seattle and 2.8 percent at Los Angeles."

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Bloomberg points out that these cuts will likely benefit United's competitors, namely Southwest, which is strong at Denver, and US Airways, which has a hub in Phoenix. Analysts say the cuts will be good for United in the long run, however, as many of the routes being trimmed are not profitable.

Not all cities will see capacity cuts, however. The airline plans to raise capacity by about 3 percent at Houston and by 12 percent at New York’s LaGuardia. Houston is a major hub for Continental, and LaGuardia is, well, LaGuardia, a key East Coast airport where United competes with American, Delta, US Airways, and Southwest.

Most airlines are cautiously adding capacity next year, to the tune of 2 percent or so. United, apparently, believes it needs to trim some excess before it can begin to expand. While the actual routes being cut aren't specified, it's reasonable to assume many were previously served by both Continental and United, and the cuts are part of the process of aligning route networks—"finding synergies," as airline executives like to say.

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