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United Continental is struggling to better compete Middle Eastern carriers

The Chief Financial Officer of the United Continental Holdings Inc. (UAL), John Rainey said yesterday in an interview that his company is interested in Boeing Co. new 777 planes in an attempt to better compete long-range flying as it braces for increased competition from Middle Eastern carriers such as Emirates.

The largest U.S. operator of Boeing’s 787 Dreamliner, is also strengthening the long-standing partnership with the German carrier Lufthansa. According to the words of the CFO of United both companies are studying ways to lower costs, including sharing catering and maintenance capabilities through their North Atlantic joint venture to better compete Emirates, the biggest long-haul carrier in the world, Qatar Airways and Etihad. Jahn Rainey added that “we’re going to look at the new 777, but we haven’t made a decision yet, we are studying the benefits it would gain with the newest 777” in the above-mentioned interview at The Year Ahead: 2014, a two-day conference in Chicago hosted by Bloomberg LP.

While United is no way near purchasing the new 777 Boeing Co. jets, because of the capital demands, considering the 292 jets already on order, its Middle Eastern rivals, the biggest Gulf carriers, Emirates, Qatar Airways Ltd. and Etihad Airways PJSC, revealed their ambition to dominate long-haul flying by ordering 225 of Boeing’s 777X jets at this week’s Dubai Airshow.

What is more, United already decided not to purchase the double-decker Airbus’s A380, because its capability of carrying more than 500 passengers is a way too much for the needs of United.
The CFO of United, John Rainey popularized the interest of the company for the new Boeing Co. 777 planes, just two days after United revealed its plans to cut spending by $2 billion through 2017. Half the savings are expected to come from a 7 percent cut in fuel consumption as the carrier adds new planes such as Boeing’s 787 Dreamliner.

In 2010 the company merged with Continental Airlines and since then is struggling to minimize the growing costs, which are increasing with a faster pace for each seat flown, than revenue from a mile flown. United expects to perform better than the last quarter, when its profit growth was trailing the competitors, by counting on its overhaul division, whose fleet of old gaz-guzzlers will be replaced in the next few years with more fuel-efficient models.

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