Issue Overview

United Confronts New Realities

United Confronts New Realities

January 23rd, 2023 at 12:32 AM EST
21 min read

Issue Overview

Polite. Complimentary. Respectful. Nobody would use these adjectives to describe Scott Kirby’s attitude toward low-cost airlines. The United Airlines chief showed up for the company’s fourth quarter earnings call with a baseball bat, swinging at rivals for sins ranging from underinvestment in technology to ignoring new post-Covid cost and supply conditions. Kirby’s thesis: The current state of U.S. aviation infrastructure and labor markets means that airlines can’t produce capacity at nearly the same cost as they could prior to Covid. Ultra-LCCs, specifically, are foolish to think they can maintain their pre-crisis business models of achieving cost efficiencies by growing at a double-digit clip. Pilot availability won’t allow it. FAA capacity won’t allow it. Aircraft production rates won’t allow it. Or so Kirby asserts.

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