Scott Kirby has a very specific view about how the three US hub-and-spoke airlines work best, having managed two of them. In his current job as president of United Continental, Kirby’s role is to oversee a major overhaul of how the carrier operates, beginning with a broad restructuring of its three domestic-focused hubs in Chicago, Denver and Houston. By United’s math, this trio has profit margins that are 10% below the inland domestic hubs operated by American Airlines and Delta. That gap is one big reason for United’s third-place finish among the three in recent years. The troubles, Kirby explained, began shortly after United swallowed up Continental back in 2010. United’s post-merger decision to shrink, forced by investor demands that the carrier curb capacity to bolster fares and profits, was a weak choice, he said. United cut seat growth domestically by 8% over the next six years, while Delta and American grew 8 and 3%, respectively, according to United. That growth by its rivals put United on the defensive as they made inroads into its Middle America hubs. Almost halfway through his second year as president of United, Kirby, 50, wants to reverse this trend. “Our growth—and strengthening our hubs—is absolutely the critical, essential element to driving higher ... margins at United,” Kirby recently said in response to a dubious analyst. “I’m absolutely certain about it.” Analysts and investors largely agree with his diagnosis of United’s ills, if not his prescription—sustained growth. Annual capacity expansion of as high as 6% until 2021, or “nearly the equivalent of another Spirit-sized airline,” JPMorgan analyst Jamie Baker said in a client note, has sparked deep discomfort in some quarters. Such an aggressive move by a mature U.S. airline is a throwback to the 1990s, when major carriers were more than happy to throw elbows in a bid for supremacy. “United is, to some degree, ripping up the airline economics playbook from the past decade,” said Seth Kaplan, managing partner of trade journal Airline Weekly. Story has more details.<br/>
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United will end service to Sendai and Shanghai Pudong from its Guam hub in the coming months, the latest in a series of cuts to its Micronesia operation. The carrier will end service from Guam to Sendai on 1 April and Shanghai Pudong on 22 March, United confirms and FlightGlobal schedules show. "Guam remains an important hub for United," the airline says. "We are adjusting the capacity between Guam and Japan/China in response to the current weak demand for travel." Guam saw visitor numbers from Japan plummet in late 2017. For the three months ending in November, Japanese visitor arrivals fell nearly a third to 122,705 year over year, data from the Guam Visitors Bureau shows. United will also reduce capacity on routes to Japan it continues to operate from Guam. It will shift all three of its daily Tokyo Narita flights to 166-seat Boeing 737-800 aircraft from early May, replacing 364-seat Boeing 777-200s on two of the three rotations. In addition, the airline will reduce frequency to Nagoya and Osaka Kansai to daily from twice daily on 27 March. United is scheduled to reduce Guam capacity by 16.7% in H1 2018 compared to 2017, schedules show. Capacity to Japan will be down more than a quarter. "As Guam's hometown airline, we remain committed to doing our part in supporting the local economy and we look forward to an increase in demand so we can return to our normal flight schedules," the carrier says.<br/>
SIA is turning to its employees for ideas. The carrier is setting up a lab and encouraging workers across its group -- including SilkAir and Scoot -- to submit proposals that would help boost efficiency in its operations, CEO Goh Choon Phong said Monday in Singapore. The company is also working with research agencies to use big data to meet the goal. “The whole idea about creating a digital innovation lab is an important step,” Goh said. “We want our staff to be able to experiment with those ideas and try to see whether we can get some concrete result out of it. The mindset change here is that we as an organization must also be willing to accept that many of this may not work.” Selected proposals will receive funds of US$3,800 to test their suggestions further with help from internal or external parties, including startups. After reporting a surprise loss in the quarter through March last year, the first in five years, Goh kicked off steps to tackle costs and announced in June that the transformation plan may include job cuts. While he has revealed few details of the revamp, he is seeking to better position the group for “long-term sustainable growth.”<br/>
A foreign player has expressed interest in acquiring 49% of soon-to-be-privatised Air India. Aviation secretary R N Choubey said this company has given an "unsolicited expression of interest for AI's airline arm." While the identity of this player and whether it is an airline is not being revealed at the moment, Singapore Airlines (SIA) is among the foreign players that are looking at AI's disinvestment process with interest. Its JV airline with Tatas, Vistara, has an "open mind" for AI if it makes business sense. "SIA is very keen on AI," said a person in the know. Qatar is the other global biggie that wants to start a domestic carrier in India and has for long wanted to pick up a stake in IndiGo. Incidentally IndiGo has given a formal expression of interest for AI's airline arm. "As of now it will not be possible to say who this foreign player is and whether it is a foreign airline or some other company. We need to check with them if they are okay with their identity being revealed at this stage," said a senior ministry official. However it is likely that the foreign player is an airline as government had earlier this month allowed foreign airlines to invest up to 49% in Air India, with the condition that AI's substantial ownership and control remains with the Indian partner and Indian nationals. Sources say at the moment, Tata-SIA and IndiGo are the main contenders for AI's airline arm.<br/>