United Airlines may be poised to drop one of its hubs

There's a growing contradiction at United Continental. On the one hand, the company has maintained its commitment to capacity discipline. In the face of weak unit revenue trends, United is holding domestic capacity growth below 2% this year. On the other hand, the company admitted last month that domestic capacity cuts have caused United to lose market share in its hubs over the past 5 years. It believes this has hurt its unit revenue. This puts CE Oscar Munoz and his management team in a bind. If United Airlines increases its domestic growth rate, it will worsen the current capacity glut, especially if it provokes a response from any of United's competitors. That would almost certainly drive unit revenue down even further. But if it does nothing, United's market share in its hubs will continue to languish. <br/>