United Airlines – the wholly owned subsidiary of United Continental Holdings Inc. (UAL - Analyst Report) – is slated to launch non-stop flights between Chicago and Edinburgh on May 22, 2014. Subject to regulatory approval, the flight will mark the first non-stop scheduled commercial service between the two cities.
Initially, United will run five weekly flights between May 22 and June 11 and will start operating daily flights between Jun 12 and Sep 1. Frequency will drop to four flights a week between Sep 2 and Oct 5, 2014.United plans to use The Boeing Company’s (BA - Analyst Report) narrow bodied 757-200 aircraft with 169 seats including16 flat-bed options.
The east bound flights will depart Chicago at 6 P.M. local time and will take 7 hours 45 minutes to reach Edinburgh. On the contrary, the flights to Chicago will take 50 minutes more and will cost a minimum of $1500 for a round trip journey. According to United, the flights are strategically timed to allow passengers to connect with 125 different destinations across the America’s. Notably, United currently operates non-stop flights between New York and Edinburgh, having started operations in 1998.
The airline traffic demand is only expected to increase in the future as Scotland is set to host two popular sporting extravaganzas– the Commonwealth Games and Ryder Cup in 2014. United wants to tap this opportunity by offering direct routes between the countries and thus eliminating the need for visitors to take connecting flights. Meanwhile, the new airline service will not only enhance passenger count but will also increase the transatlantic offering in Scotland’s busiest airport.
Year to date United has lost ground to rival Delta Airlines Inc. (DAL - Analyst Report) in the transatlantic route. In the first eight months of the year the company’s Atlantic passenger count has declined 1.2%, whereas Delta’s traffic has increased 0.5% in the same route.
Delta has been on an expansion spree as the company is expanding its services both domestically and internationally. We believe that the launch of these long haul routes will provide United the impetus to improve its traffic and capacity, thus boosting the company’s performance.
United Airlines, which operates with JetBlue Airways Corp. (JBLU - Analyst Report) , currently carries a Zacks Rank #3 (Hold).