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United Prepares for Life After Independence

November 11, 2005

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With its upstart rival Independence Air in shambles, United Airlines is moving quickly to beef up its operations at Washington Dulles International Airport. The Washington Post reports the carrier is preparing to hire 2,000 flight attendants, with about 700 of them to be based at Dulles.

Independence, which operated as a United regional carrier before challenging its former parent, was United's biggest competitor at Dulles before folding its wings and filing for bankruptcy last week. It is expected to be liquidated by early next year.

United and US Airways matched Independence Air's low fares on East Coast routes and are expected to benefit, at least temporarily, by the upstart carrier's demise.

Unable to join the party is bankrupt Delta Airlines, which reported it suffered a staggering $1 billion loss in the July through September period. The struggling carrier blames a more than 50 percent increase in its fuel bills for the red ink.

United has been operating under Chapter 11 bankruptcy itself for nearly three years but plans to emerge in February. As part of its revised business plan it is adding numerous international flights from Dulles, its primary international hub.

US Air emerged recently from bankruptcy when it merged with America West. Though still not profitable, the merged carrier is, like United, reporting high passenger volume.

What It Means

What all this means for consumers is that prices will be going up and planes will be more crowded.

Independence Air forced the major carriers to lower their prices and add flights on routes that were only marginally profitable. With Independence out of the way, the majors can raise prices and trim their schedules, at least for awhile.

Of course, nothing stands still in the airline business. If a stronger low-cost carrier, like JetBlue, decides to beef up its presence at Dulles, the whole cycle could start over again. JetBlue has done just that in the New York market, adding flights at Newark and LaGuardia, in addition to those at its John F. Kennedy hub.

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