United Eyes Mexico Routes

[Fly]

Carrier hoping to fend off Frontier with 4 destinations


By David Kesmodel, Rocky Mountain News
May 1, 2004

United Airlines has stepped up efforts to compete with rival Frontier on popular routes from Denver to Mexico, adding two more destinations to its applications to U.S. regulators for new service.

United, which earlier asked for permission to fly from Denver to Cancún and Puerto Vallarta, has applied for the right to fly to Ixtapa and San José del Cabo.

All four markets are served by Denver-based Frontier, the discounter that has been chipping away at United's big lead in market share at Denver International Airport.

United asked the Department of Transportation for the right to offer Saturday-only service to both Ixtapa and San José del Cabo during the months of December through April. The service "will serve the public interest as it will stimulate passenger travel and expand the service options available to consumers," United told the agency.

United, which is in bankruptcy protection, could face competition on its requests. Two smaller carriers, Allegiant Air and Champion Air, are challenging its bid to fly to Cancún, and Champion is challenging its bid to fly to Puerto Vallarta.

Air-service agreements between the United States and Mexico permit only two U.S. carriers to fly any route between the countries.

Las Vegas-based Allegiant is reviewing whether to oppose United's requests to offer service to Puerto Vallarta, Ixtapa and San José del Cabo, a spokesman said. A spokesman for Bloomington, Minn.-based Champion Air did not return calls.

Frontier is pleased with demand on all five routes it flies to Mexico. The only market it serves that United has not applied for is Mazatlán.

Chicago-based United, its Ted discount airline and its United Express partners fly about 62 percent of DIA's paying passengers. Frontier and its Frontier JetExpress commuter operation fly about 16.5 percent.

Ted, which began service in February, would fly the proposed Denver-Puerto Vallarta route, United officials have said. That service, which would come daily during December through April, would mark Ted's first international flying.

 

[C54Capt]

Looks like they just announce a bunch of Mexico, Central America, and Carribean destinations and are just waiting on gov't approval. Should be a good move since Frontier has been doing extremely well on many of these routes. Allegiant and Champion probably stand the most to lose if these routes start stealing from the charter market.

 

[Cosmo]

Adding to C54Capt's comments above, the expansion will add leisure flights from each of United's five hubs to destinations in Mexico, the Caribbean and Central America, although it's not clear which, if any, of these new flights will be TED. This service is scheduled to begin in December, although some routes are subject to government approval. You can read United's press release issued this afternoon here.

 

[Bigsky]

Should be a good move since Frontier has been doing extremely well on many of these routes

C54Capt. While competition on these Mexican routes will be good for the consumer, it will obviously decrease the yields on theses routes that are served both by UAL and F9 when they are forced to match fares and offer pricing below the already low fares. Since F9 has already established great service to these mostly leisure destinations it will be quite a challenge for UAL/TED in these markets. I guess it's worth a try.

cheers

bigsky