By Jeffrey Dastin
NEW YORK (Reuters) - United Airlines said on Tuesday it plans to end service in October at New York's John F. Kennedy International Airport, where it failed to profit over seven years because it offered few connections to other cities, and add flights at its Newark, New Jersey, hub.
Beginning Oct. 25, United Continental Holdings Inc (N:UAL) will transfer its only flights from JFK, which serve Los Angeles and San Francisco on Boeing Co (N:BA) 757 aircraft, to Newark Liberty International Airport, its hub in New Jersey with hundreds of connecting flights.
The move marks an effort by United to win travelers in the highly competitive transcontinental market, where rivals American Airlines Group Inc (O:AAL), Delta Air Lines Inc (N:DAL) and JetBlue Airways Corp (O:JBLU) have invested heavily in renovating aircraft cabins and airport terminals.
United is transferring the revamped "Premium Service" 757 aircraft to Newark, where customers will have access to connecting flights, new restaurants and technology displays following a $2 billion investment. The carrier also promises the greatest number of transcontinental flights, at 56 daily departures on peak days in November, compared with American's 36 and Delta's 30, according to United.
United has agreed to sell its JFK slots to Delta and buy Delta's Newark slots in turn, pending regulatory approval, United said.
"United's JFK exit is not anticipated to have a material competitive impact on incumbents" JetBlue and Delta, JPMorgan (NYSE:JPM) analyst Jamie Baker said in a research note.
"Based on November schedules, we estimate that United's NY-LAX/SFO capacity will decline by 22 percent (departures) and 26 percent (seats)" from October 2015, Baker said in his note, which investors may see as a positive amid concern that U.S. airline capacity is exceeding demand..
The move may also cut costs. The airline expects to reduce staffing as part of the consolidation, although it will work with unions to find workers alternative jobs, United's Chief Revenue Officer Jim Compton said. The airline currently employs about 270 workers at JFK.
The Chicago-based airline said it will maintain service at New York's LaGuardia Airport. It will add larger Boeing 767 aircraft to trans-Atlantic flights currently served by 757s, which it will switch to transcontinental routes.