As the increasingly competitive US airline industry jostles amongst itself to increase profits through cost cutting measures, United Airlines sprang a surprise as it announced that from now onwards it will only allow low fare flyers on its flights to carry just one bag that should fit under the seat even restricting them to use overhead bins as bag space in a bid to improve their profitability.
The already disgruntled flyers who face the brunt of such cost-cutting measures are likely to become even more frustrated after this move by United Airlines.
The burden on consumers is likely to increase with it as they continue to deal with problems like charging fees for nearly everything and restrictions on travel.
In the same statement where United announced the move to restrict the amount of bags carried, it further went on and added that its flyers would not be assigned seats till the day of departure/arrival.
With these new steps, $4.8 billion will be added to the operating income of United Airlines as per company estimates. This amount will be added each year. Consumers will face a choice of paying up for more than one bag or have the option of paying a fare that is higher if they don’t want to experience the stifling discomforts and restrictions surrounding the “Basic Economy” Packages.
United, in its strategy to rival Delta airlines, has also announced that it would save up to $1.8 billion by deferring the planned buy of Boeing Co 737-700 planes. They ordered 61 of these planes which will now be held back till 2018, allowing them to save the money previously noted in capital expenditures.
United has plans to increase its capacity in the 1-2% range for the next year as it plans to buy 737 MAX airplanes to make it possible to compete with low-cost competitors like Frontier and Spirit Airlines.