United's $3.1 Billion Bottom-Line Plan

United Airlines plans to improve its bottom line by $3.1 billion by 2018, including winning back corporate market share lost in the difficult post-merger years, executives told investors.

The carrier projects that operational improvements alone will add $300 million, partly by reducing costs related to delays and cancellations, such as meal and hotel vouchers for stranded passengers and booking them on other airlines, United CEO Oscar Munoz said. Operational improvements also will help the carrier regain corporate market share and thus increase revenue.

Late last year, United launched its Global Performance Commitment, which guarantees compensation to corporate clients should its on-time and cancellation performances fall below those of both Delta Air Lines and American Airlines, and United is on track to meet that commitment this year, vice chairman and chief revenue officer Jim Compton said. "Year to date, we're not paying a nickel, and we expect that to continue for the rest of the year."

Over the past six months, United's operation has improved to "consistently perform in line with our peers," Munoz said. Meanwhile, the carrier's market share has shown improvement, particularly in hub markets, he said.

United projects that another $1.5 billion will come from "commercial enhancements," such as increasing premium economy seats by 20 percent and premium class seats by 30 percent, introducing a basic economy fare and implementing a new revenue system better at predicting demand, Compton said.

Cost management initiatives—for example, replacing 50-seat regional aircraft with larger aircraft and installing slim-line seats, both of which increase the number of—will drive another $1.3 billion, executives said.