United Unveils New Short-Hop Shuttle Service

United Airlines on Thursday formally unveiled plans for its new low-cost, no-frills service in California and other western states, where the carrier hopes to grab market share from short-haul powerhouse Southwest Airlines.

The Shuttle by United, as the new airline is officially known, starts flying Oct. 1, with 184 daily flights between eight pairs of cities, including Los Angeles and San Francisco. By December, the new airline plans to operate 286 flights daily between 10 destinations.

Coach seats on the shuttle will range between $62 and $139 one way.

Besides challenging Southwest, United chose to launch its no-frills service in California because the state’s business climate and economy are improving, according to Gerald Greenwald, chairman of UAL, United parent’s company.

UAL, which employs 28,000 people in California, expects its new shuttle service to create 200 to 300 additional jobs by year’s end, he said.

Chicago-based UAL is launching the new airline after it received major labor concessions from its employees two weeks ago. The workers, in turn, acquired 55% of the company’s stock, making UAL the nation’s biggest employee-owned concern.

Armed with those lower labor costs, UAL decided to debut the Shuttle by United in California, in a direct competitive attack on Southwest, which specializes in short-distance flights.

“We have no intention of giving up any traffic or revenue,” said Gary Kelly, Southwest’s chief financial officer.

Greenwald, surrounded by about 200 United employees at a press conference at Los Angeles International Airport, said the new shuttle service would compete “dollar for dollar” on price against Southwest.

Shuttle by United initially will fly these routes: San Francisco to Los Angeles, Burbank, Ontario, San Diego, Seattle and Las Vegas; and from Los Angeles to Sacramento and Oakland.

By year’s end, the airline also will fly from Los Angeles to Las Vegas and Phoenix; San Diego to Sacramento, and Oakland to Burbank, Ontario and Seattle.