Page last updated at 13:50 GMT, Wednesday, 4 June 2008 14:50 UK

United Airlines cuts 100 planes

United Airlines
United Airlines plans to ground 100 of its older aircraft

US carrier United Airlines is to ground 100 of its planes and cut between 900 and 1,100 jobs, in addition to 500 already announced lay-offs.

It blamed the decision on the need to cope with the spiralling cost of fuel and a weakening US economy.

It will also scrap its economy-class only Ted service and reconfigure those planes to include first-class seats.

The planes to be grounded will be 94 Boeing 737s and six of the larger Boeing 747s.

The plan will lead to a 17-18% cut in its domestic capacity and international capacity will be scaled back by 4-5%.

'Decisive' action

United recently shelved plans to merge with US Airways after months of talks about a cost-saving deal.

Many airlines have been struggling after oil hit a record $135 a barrel and aviation fuel prices surged 76% in the past year.

"This environment demands that we and the industry act decisively and responsibly," said Glenn Tilton, United's chief executive.

"At United, we continue to do the right work to reduce costs and increase revenue to respond to record fuel costs and the challenging economic environment."

Tough times

In April, the Chicago-based carrier announced it would cut some 500 jobs in an effort to save costs.

The latest move will make a number of salaried, contract and management workers redundant by the end of the year.

Last week, the International Air Transport Association (IATA) warned the airline industry faced a "grim" outlook and passenger numbers would be affected by rising fuel costs and the deteriorating economic situation.

The number of airline passengers grew by 3% in April, down from 5.4% in the same month the previous year, it said.

And for the first four months of the year, growth was 5.6%, compared to 6.7% the previous year.

Cost-saving

The airline industry has already seen a number of carriers collapse in Europe, Asia and the US, and only last week UK airline Silverjet went into administration.

American Airlines recently said it would lay off workers and reduce its domestic flight capacity to 12% after the busy summer period in a bid to keep finances under control.

Other airline companies have started charging passengers to check in bags.




SEE ALSO
US carriers shelve merger talks
30 May 08 |  Business
Sky-high fuel hurts US airlines
23 Apr 08 |  Business
United grounds Boeing 777 fleet
02 Apr 08 |  Business
US airline deal talk intensifies
11 Feb 08 |  Business
US airline payout angers workers
07 Dec 07 |  Business

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