United Airlines will eliminate its service between San Francisco and Nagoya, Japan, where Toyota has its head office, as part of a 7 percent cut in expensive international flights.
UAL Corp., the parent of United (NASDAQ: UAUA), reported a loss of $2.7 billion on Tuesday, but it beat Wall Street's earnings estimates.
In an email to United employees, CEO Glenn Tilton said, "As many carriers -- led by United -- have shifted capacity to the international market, this has created new pressure on revenue." Tilton said United will eliminate flights between Denver and London, Los Angeles and Frankfurt, as well as the San Francisco to Nagoya service. The cuts will take place in the fourth quarter.
United will close its operations, with a few local employees, in Nagoya, where Toyota Motor Corp. (NYSE: TM) has its headquarters. Toyota assigned special interpreters to the San Francisco flight -- they interpreted for Toyota employees but didn't do flight attendant work.
The forward, or first class cabins weren't typically crowded on the Nagoya flight, said a flight attendant for United who worked on the route. First and business class -- the front of the plane -- generate most of the profits from a flight. "I'm not surprised they stopped the flights," the attendant said.
Source: http://pacific.bizjournals.com/pacific/stories/2008/07/21/daily19.html?ana=yfcpc