United rebuilding RDU service; The airline will re-establish local offices in September, a move that is likely to bring jobs

July 6, 2007

Nearly six years ago, United Airlines ended a 54-year-old relationship by yanking its big jetliners from Raleigh-Durham International Airport.

Now the affair is back on.

This year, the Chicago carrier returned those jetliners to handle five flights it had previously turned over to commuters. Then last week, in another sign of its renewed commitment, it announced that it is re-establishing offices at RDU in September. The move is expected to result in dozens of new hires and, possibly, the Triangle's first nonstop flight to San Francisco.

"It's not a decision made lightly," said Doug Abbey, a partner in the Velocity Group, a Washington, D.C., aviation consulting firm. "They obviously made the decision they can make more money flying [routes from RDU] themselves. It's pure economics."

After the 2001 terrorist attacks caused passenger traffic to plummet, airlines -- including United -- increasingly turned to smaller regional jetliners, which could earn profits by filling fewer seats. But with this year's substitutions, United's Boeing 737 jetliners are now used on five of 12 daily departures from RDU, including a nonstop to Denver which began in April.

The larger planes mean more seats, including first class, are heading to the destinations United serves from RDU -- Chicago O'Hare, Washington Dulles and Denver. RDU officials hope more flights with the bigger mainline jets may be coming.

"We think its a big deal," RDU marketing director Teresa Damiano said. "It's the first time in United history they've gone from express to mainline service after downsizing, and we're happy to see it.

"It adds competitive choices for current customers as well as further air service development." Damiano hopes that the success of the Denver flight, which routinely is booked to capacity, will convince United to begin a nonstop to San Francisco, a top destination for Triangle travelers. United won't comment on future flights.

But the ramp up is a big turnaround for United, which has long figured into RDU's history. Capital Airlines, which later changed its name to United, was the second airline to serve RDU behind Eastern when it began local fights in 1947.

United laid off its 50 employees and pulled big jets from RDU in October 2001 after profits evaporated. Local routes were turned over to commuter partners with regional jets small enough for the reduced demand. It subsequently filed for Chapter 11 protection, exiting bankruptcy in early 2006 with a third fewer workers, a fleet 20 percent smaller and annual costs slated to be $7 billion lower by 2010. More international routes have been added, but the carrier cut domestic flights overall. In May, United Airlines cut its 2007 growth plan for U.S. seating capacity by 2 percent.

But RDU gained United flights, a testament to the strength of the Triangle market, Damiano said.

Reopening its offices means United baggage handlers and ticket agents will handle ground operations while United pilots will fly the big jets. Mesa Air Group will continue to operate the seven remaining United Express flights at RDU.

United's ground operations are now handled by 49 Air Wisconsin employees. The Appleton, Wis.-based airline is trying to line up work with other carriers at RDU so the employees won't be laid off, spokeswoman Barb Jones said. Air Wisconsin also provides ground handling services for Air Canada at RDU. Workers also can apply for jobs at other cities served by Air Wisconsin or apply for any unfilled openings at United, which is recalling furloughed workers.

United's rebuilding already is giving passengers more choices. No other airline had service from RDU to Denver before United began flights in April. The larger 737s have 104 to 128 seats. The regional jets on the remaining seven flights have 50 to 70 seats.

More seats may mean some cheaper prices. A one-way, two-week advance purchase coach ticket to Chicago O'Hare costs $119 on United and $139 on American but Southwest offers an $89 ticket to Chicago Midway.

"There will be a relatively higher portion of lower fares on larger planes, but what establishes [low fares] is competition," said Abbey, the Washington aviation consultant. Abbey said United might add a flight to San Francisco where it has a hub.

"It's something United would consider," Abbey said. "I don't see it in the near term but it's plausible, especially with all the high tech in the Triangle."

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