United sees room for higher US fares next year, even with greater seat capacity when the grounded Boeing 737 MAX returns to the market, President Scott Kirby said at a conference on Thursday. The global grounding of Boeing’s 737 MAX in mid-March forced airlines to cancel thousands of flights, triggering higher fares during the peak northern hemisphere summer travel season and helping lift airlines’ unit revenue growth. Once the MAX is certified to fly again following software fixes by Boeing, some investors fear that airlines will have to lower fares to fill a potential surplus in domestic air travel capacity. Kirby played down those concerns. “This is an industry that prices below the point where you would expect supply and demand to intercept today, which means there’s room to raise fares,” he said. US domestic capacity is seen growing by 6% or 7% over the next 12 months, versus around 2% or 2.5% growth currently, according to analysts. United shocked investors when it unveiled a three-year plan in early 2018 to grow its own capacity by an annual 4% to 6%, a faster rate than its competitors, but so far its strategy of running more flights out of its hubs has paid off. Now United is more likely to turn its focus on improving earnings or margins, Kirby said, noting that all of its growth is in places where it has the best competitive position.<br/>
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Latin American airline Avianca announced the exchange of US$475.2m in bonds on Thursday, part of a plan to change its capital structure amid ongoing financial problems and enough to receive additional financing from United Airlines. Avianca said it would extend the deadline for bond holders to exchange their paper until Sept. 25, in a bid to exchange a total of $550 million worth of bonds coming due next year. Investors can exchange the bonds for others also coming due in 2020, but with a $50 bonus per $1,000. United and Kingsland Holdings Limited, which between them control Avianca, said in a joint statement that results of the exchange thus far were sufficient for it to give the airline up to $250 million in additional financing. “We are also pleased to confirm that this achievement is sufficient to satisfy United’s requirement for the exchange of these May 2020 bonds, regarding our previously announced offer, together with Kingsland, to loan $250m to Avianca Holdings,” said John Gebo, senior VP of alliances for United. “Our loan remains contingent on certain other conditions being met by Avianca Holdings, including certain commitments and waivers made by other stakeholders,” Gebo said.<br/>
Ethiopian Airlines will offer three flights a week between Houston and Lomé, Togo, in West Africa. The flights, scheduled to start Dec. 15, were first announced in January. But that announcement did not include the route's city in West Africa. Ethiopian Airlines selected Houston for its route due to the region's large African community and oil and gas businesses. Bush Intercontinental Airport previously offered flights to Africa through SonAir's charter flight to Luanda, Angola. Known as the "Houston Express" and operated by Atlas Air, this service was canceled in 2018. "The Houston Airport System has been committed to re-establishing the direct connection with our city and region to Africa," Houston Airport System Director Mario Diaz said in a news release, "and we fully support Ethiopian Airlines in bringing this effort to fruition."<br/>
SIA will be taking over the 4X-weekly Singapore-Busan route from its regional subsidiary SilkAir. Subject to regulatory approval, the transfer will begin Oct. 28. SIA will deploy the Airbus A330-300, upguaged from the current Boeing 737-800, with a 76% capacity increase. SIA’s A330-300 seats 30 in business and 255 in economy, compared to 12 business and 150 economy on the 737-800. “Demand for SilkAir’s Busan flights since the launch of the route on May 1, 2019 has been very encouraging, and it has proven to be another popular gateway into South Korea, complementing SIA’s services to Seoul,” SIA SVP-marketing planning Tan Kai Ping said. Busan is the group’s second Korean destination. SilkAir had initially planned to use the Boeing 737 MAX 8. However, since the type’s grounding in March, the carrier has operated the 737-800 and imposed a load limit for the aircraft to make the six-hour journey.<br/>