U.S.
In 1999, United seized the opportunity to expand in several key U.S.
markets. The company significantly expanded service at both Washington
Dulles and Los Angeles airports. A few other cities are catching
United's eye as well.
Several years ago, the company earmarked Los Angeles as a star city
- a city with potential to be a United hub. The company realized this goal
in April when it officially designated Los Angeles as a hub. United
also added 30 new daily nonstop flights to business destinations and beefed
up United Shuttle service.
 With a strong presence in
Chicago, Denver, San Francisco and Los Angeles, the company turned its
attention to the U.S. East Coast, expanding service at Washington Dulles
by 62 percent. In April and May, daily departures jumped from 73 flights
to 117. A booming business community and a high percentage of Mileage Plus
members make the Dulles area a key market for United, and the company continues
to add flights there.
The community of San Jose,
CA, located just south of San Francisco, is one of the fastest growing
technology job markets in the United States. As a result, convenient air
travel is in demand, and competition is heating up. Both American Airlines
and Southwest Airlines serve this burgeoning market, and United is strengthening
its foothold. United's departures at San Jose International airport have
increased bv 64.7 percent January through September 1999 compared to the
same period last year.
In recent years, Atlanta has
earned a reputation as one of the "hottest" business cities in the United
States. Atlanta also gained worldwide attention hosting the 1996 Olympic
Games. As the city continues to flourish, so does the need for air
service. Both Delta Airlines and USAirways are adding service in Atlanta.
United has increased service there by 15 percent with new service
from Los Angeles and seven Washington Dulles frequencies. As the
company develops its strategies, it watches competitors' growth patterns.
During 1998 and 1999, United's top two U.S. competitors - American and
Delta also have been targeting specific areas of the country. To regain
lost market share on the West Coast, American acquired West region carrier,
Reno Air. On the East Coast, American is building a new $1.3 billion, 59-gate
terminal at New York Kennedy Airport. Delta is expanding flights at its
Atlanta hub, with the largest increases to East Coast business markets.
Delta also recently acquired two of its regional commuters Atlantic Southeast
Airlines and ComAir.
International
As Pacific region economies show signs of recovery, United continues
to watch markets in these parts of the world for opportunities to inaugurate
new flights and reinstate suspended service.
China's growing middle class
population is boosting the country's air traffic levels to an all-time
high. According to United's International Planning Department, the company
is well-positioned to take advantage of this opportunity. However, competition
among U.S. carriers to serve China is intense. A new U.S.-China aviation
agreement makes 27 flight frequencies available between 1999 and 2001.
United was awarded five weekly nonstop flights between San Francisco and
Shanghai that take effect April 2000; daily nonstop flights between San
Francisco and Beijing starting June 2000; and daily nonstop service between
Chicago and Shanghai beginning April 2001. Other U.S. airlines competing
for service to China include Northwest, American, Delta, Federal Express
and United Parcel Service.
With the economic picture
in Asia improving, United will resume its daily service between Hong Kong
and Singapore effective Feb. 16, 2000. United had discontinued this service
December 1998, replacing it with service between Hong Kong and Bangkok.
Under the U.S.-Hong Kong bilateral, United may only operate to either Singapore
or Bangkok daily beyond Hong Kong. Flights between Hong Kong and Singapore
are timed to give United a competitive advantage in that business market.
Tourist travel between the
United States and Australia is on the rise, and customers are demanding
more non- stop service. United's response is new daily nonstop service
between Los Angeles and Melbourne that began Dec. 4, 1999, and a re-timed
flight between Auckland and Los Angeles for more convenient connections
to points in the United States.
United also is lobbying for
new routes between Los Angeles and points in South America. The company
recently filed a proposal with the U.S. Department of Transportation for
daily, nonstop service between Los Angeles and Buenos Aires. Los Angeles
is the third largest market for airline traffic between the United States
and Argentina.
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