United Continental to increase business efficiency

After their merger this year, United and Continental Airlines created the largest carrier in the world. Now, the newly formed United Continental Holdings Inc. will likely cut capacity in cities across the U.S. as it adjusts to its new network and increases its business efficiency.

United Continental will cut its available seats in the U.S. by 1.9 percent as the rest of the nation's airlines increase their capacity by 2 percent, according to Daniel McKenzie, an analyst at Hudson Securities. The cut in seat traffic will boost the airline's quarterly profit and will likely benefit other airlines, like Southwest and Alaska Air, carriers that operate hubs in areas the cuts are set to affect.

In a report, McKenzie affirms that this realignment of business operations will enable the airline to increase its business efficiency and reduce business costs. "United Continental management appears serious about continuing to cut unprofitable, domestic flying," he avers. United Continental's executives hope the airline will achieve its a profit in the first quarter for the first time since 2000.

Some of the cities that will experience cuts are Chicago at a 1.8 percent reduction, Denver at a 5.6 percent cut and Los Angeles at a 2.8 percent decrease. By effectively monitoring its flight schedule, the company hopes to trim loses and increase its efficiency.