United's new separate low-cost carrier, which yesterday named its first executive, plans to serve 37 U.S. cities with a fleet of 134 aircraft, according to a preliminary internal plan for the carrier obtained by The DAILY.

As part of detailed presentations recently made to its union leaders and creditors committee, United defined its concept for its low-cost carrier, explained why it will be competitive, and tried to explain how United will avoid the failures of similar efforts by other U.S. major carriers. United begins the presentation by admitting it's uncompetitive in several low-yield markets.

Even with yield growth and mainline cost reductions, "United will continue to be uncompetitive in these markets," the presentation said, so the airline needs to "develop a low-cost offering and achieve a cost structure competitive" with the existing low-cost carriers. The presentation declares all previous attempts by major airlines to operate low-cost carriers failed "due to a lack of competitive cost structure."

To break that mold, United believes that a "truly separate operation is necessary" for its low-cost carrier -- currently code-named Starfish -- to be successful. Beyond lower costs and competitive labor costs, Starfish must have a unique brand and marketing to "reduce customer confusion" and boost "customer excitement." The operation must have a "distinct" employee culture and focus, as well as an "entrepreneurial environment."