‘There’s just no new opportunities’: United execs rip into low-cost rivals

During United’s Q2 earnings call on Thursday, CCO Andrew Nocella declared that low-margin rivals have “largely run their course.” “The thing that’s very interesting is the growth line by these carriers is extremely unprofitable — just the business plans, in some cases, they largely run their course,” Nocella said on the call. “And there’s just no new opportunities available today.” His comments come as a glut in domestic capacity dragged down United’s and Delta’s third-quarter outlook, two airlines that have stood out in recent years due to their international networks, premium seating and lucrative loyalty programs. Much of that domestic overcapacity has been spurred by ultra-low-cost carriers, which has caused airlines to aggressively discount fares in domestic markets. Coupled with rising costs, the airline industry has been falling short of expectations when it comes to profits. But United executives are bullish that the sector will course correct on the overcapacity in August, with many repeatedly describing it as “unprofitable flying” for their low-cost rivals. “The unprofitable capacity is just not sustainable,” Nocella said. While Delta and United continue to make up the majority of profits in the U.S. airline industry, others like Southwest, JetBlue, Spirit and Frontier have been looking for other ways to restore their profitability. <br/>