United Continental shares fell more than 6% in after-hours trading Tuesday as the airline said it plans to increase capacity, likely threatening its profit margin as it is locked in a price war with low-cost carriers. “The best way to compete with low-cost carriers is to match their prices,” one of its executives said on an earnings call. “We can’t let low-cost carriers have price advantages in our hubs.” The warning spooked investors, who are keeping a close eye on United’s bottom line as the company tries to prevail in a fierce fare war that has sent some ticket prices tumbling. Shares of Delta and American Airlines also fell more than 5% after hours. United said it expected to increase its capacity by between 4 and 6% in 2018, and would likely grow by a similar amount in 2019 and 2020, on the grounds that it would give the carrier a competitive edge in its fight against low-cost airlines. The carrier by passenger traffic earlier reported Q4 net profit of $580m, or $1.99 per share, compared with $397m, or $1.26 per share, in the year-ago quarter, helped by costly last-minute ticket purchases. Excluding special charges, United reported profit of $1.40 per share, beating Wall Street’s average estimate of $1.34 per share, according to Thomson Reuters. In the current period, higher labour costs, costlier fuel and the ongoing pricing battle are weighing on the carrier’s profit margins. United added to investors’ unease by saying it will continue to compete with low-cost airlines on price. In Q4, United posted a 0.2% increase in passenger unit revenue, a closely watched measurement of an airline’s success, after a posting a sharp decline in the prior quarter.<br/>
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A potential new mid-sized aircraft being studied by Boeing could reach the market in eight to 10 years, a senior United Airlines executive said on Tuesday. United is holding off evaluating possible contenders to replace its Boeing 757 and 767 fleet as Boeing ponders whether to launch the new model, but the potential project is likely to “well defined” some time this year, Gerry Laderman, senior VP of finance at United said. Laderman said the airline would also look at the smallest model of the Boeing 787 Dreamliner and the Airbus A321neo in the same stage its fleet replacement plans. Boeing has said it is studying a new mid-sized aircraft to reach the market around the middle of next decade. It is too early to look at small jets including the Bombardier CSeries, Laderman said. Laderman, a pioneer of secured funding popular with US carriers known as Enhanced Equipment Trust Certificates, said United had studied whether to change tack and finance jets through sale-and-leaseback deals, but decided not to go ahead. <br/>
ANA Group plans to boost international, domestic and air cargo frequencies in its 2018 fiscal year, in “response to increased air travel demand on a global scale,” the company said. ANA also plans to rapidly deploy its incoming fleet of new Boeing 787 and Airbus A320neo family aircraft. ANA’s 2018 fiscal year begins April 1. ANA said it will continue to pursue its dual hub model in Tokyo in 2018 “to capitalise on the characteristics of Haneda and Narita airports, capturing not only outbound travel demand from Japan but also inbound demand from overseas and connecting travel between North America and Asia.” As of Dec. 30, 2017, ANA had taken delivery of three of 11 new A320neos and two of 22 new A321neos. Three A380s are also scheduled for delivery beginning 2019, which ANA is planning to introduce on its Hawaii routes. For Boeing aircraft, ANA has taken delivery of all 36 787-8s ordered and 27 of 44 new 787-9s. ANA has additional orders in for three 787-10s. For international routes, ANA will add 19 additional round trip flights.<br/>
Deputy Transport Minister Pailin Chuchottaworn has urged THAI to procure smaller aircraft to decrease operation and maintenance costs for some of the national carrier's routes, in a bid to decrease its large debt and keep up with emerging low-cost airlines. The deputy minister commented on the airline's financial state after his scheduled policy-giving visit to THAI's headquarters yesterday, as part of a government initiative to decrease the huge debt levels at seven state enterprises. According to Pailin, THAI will have to "figure out" how to lower its overall fixed costs in order to succeed with its corporate rehabilitation plans to decrease its accumulated debt. He urged the airline to conduct research into how some low-cost airlines are able to offer full service at cheaper prices and comparatively lower fixed costs. He also instructed THAI to deal with its discharged aircraft, which are awaiting procurement by other airlines. Transport Ministry reports state that for this year, THAI plans to procure 28 more planes to compensate for its discharged aircraft. According to the report, 19 will be used by the national carrier, while the remaining nine will be used by its low-cost subsidiary airline, Thai Smile Air.<br/>