January 24, 2018 / 2:25 PM / a month ago

United Continental falls on plans to raise capacity

Jan 24 (Reuters) - Shares of United Continental Holdings Inc fell more than 7 percent before the bell on Wednesday after the airline said it plans to add capacity, likely threatening its profit margin, as it is locked in a price war with low-cost carriers.

The parent of the No.3 U.S. airline plans to increase capacity by between 4 percent and 6 percent in 2018, and aims to likely grow by a similar rate in 2019 and 2020, saying it would give the carrier a competitive edge in its fight against low-cost airlines such as Southwest Airlines and JetBlu Airways.

The decision comes months after United ordered 10 extra Airbus A350 jetliners, while ditching the largest model, the A350-1000, in favor of the smaller and more popular A350-900 and delaying deliveries to save cash.

United’s shares are poised to open lower despite the bigger-than-expected jump in quarterly profit it reported on Tuesday.

Shares of other U.S. airline companies such as American Airlines Group and Delta Air Lines also fell in premarket trading. (Reporting by Rachit Vats in Bengaluru; Editing by Supriya Kurane)

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