United Details Plans for Low-Cost Operation

United Airlines today said Denver International Airport will serve as the "launch hub" for a new low-cost operation set to start service in February. Initial plans call for flights using four Airbus 156-seat A320s from Denver to Las Vegas, New Orleans, Orlando, Ontario, Calif., Phoenix, Reno and Tampa. United rival Frontier Airlines already operates from Denver to each of the seven destinations.

United said additional destinations--including other hubs--will be announced at a later date. Once fully deployed in late 2004, United's low-cost operation will field a fleet of 40 A320s.

The new unit, which for months has been internally dubbed Starfish but still has no official name, will offer a "simplified fare structure with low cost business and leisure fare options." It will provide pre-assigned seating--including slightly roomier Economy Plus seats--and inflight food and beverage service.

The low-cost carrier-within-a-carrier concept has failed several times in the past, though Delta continues to grow its Song unit. In a hotline message today to employees, United said the difference between its new operation and the defunct United Shuttle is the ability to leverage "significant, long-term cost reductions" already achieved as part of UAL's bankruptcy reorganization. United added that its operation will be "the only low-cost carrier to benefit from mainline connectivity and seamless access to the global network" and represents a long-term commitment to Denver. Industry observers earlier this year had speculated United would consider abandoning the Denver hub in an attempt to streamline operations.

Tickets for the new services will go on sale in November via all existing sales channels. United also is developing a channel "unique to the low-cost operation."