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United plans rapid growth through 2020

United Airlines unveiled plans to continue to grow capacity at an elevated rate through 2020, as it aims to catch up with domestic competitors.

Capacity will increase 4-6% in 2018, 2019 and 2020, says Scott Kirby, president of United, during a quarterly earnings presentation on 23 January.

"The opportunity at United is not about shrinking, it's about growing back to where United should have been if hadn't been negative 8% growth over the past [few] years," he says in an effort to pre-empt analyst questions about the high rate of growth.

Kirby adds that the capacity growth is about catching up with competitors American Airlines and Delta Air Lines, which grew during the first half of the decade when United shrank by roughly 8%.

Capacity at United grew 3.5% in 2017.

US domestic growth will outpace international this year, says Kirby in response to analyst questions. Much of that will come from the influx of 41 50-seat regional jets, including both Bombardier CRJ200s and Embraer ERJ-145s, in 2018. These aircraft will allow United to return to small markets it cut when it shrank in the 2000s and after its merger with Continental Airlines in 2010.

United also plans to add 24 aircraft to its mainline fleet in 2018. These include its first 10 Boeing 737 Max 9s, as well as four Boeing 777-300ERs and seven Boeing 787s. It will add three used Boeing 767-300ERs in the second half.

Capital expenditures will total $3.6-3.8 billion in 2018.

Unit costs (CASM) excluding fuel, special items, profit sharing and third-party expenses are forecast to be flat to down 1% in 2018.

In the first quarter, United anticipates capacity to increased 3.5-4.5%, an investor update shows. Passenger unit revenue (PRASM) is forecast to be flat to up 2%, and CASM excluding fuel, special items, profit sharing and third-party expenses flat to up 1%.

The airline anticipates a pre-tax margin of 0% for the period.

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