Major US airlines chop capacity

Bookings at American Airlines are down

Two major US airlines have announced they will slash capacity this year as the global economic downturn continues to hit demand for air travel.

Delta Air Lines will cut international capacity by 15%, 5% more than its last estimate, while American Airlines will make overall cuts of 7.5%.

Analysts expect other US airlines to make similar reductions.

Meanwhile, aircraft firm Boeing has cut its global forecast for plane demand over the next 20 years by a third.

'Dramatic reductions'

The recent bounce in the price of oil is also hitting airlines as they have to pay more for fuel.

Oil now costs over $70 a barrel, more than twice what it cost in December of last year.

"If you can't recover the cost of oil, it's going to necessitate more dramatic capacity reductions as we get to the end of the year," said Delta president Ed Bastian.

And as airlines are hit by falling demand, they order fewer new planes, therefore hitting aircraft makers too.

Boeing said it expects the number of planes to be ordered worldwide over the next 20 years to be 29,000, down from the 29,400 it predicted a year ago.

Earlier this month, Boeing revealed that aircraft orders in May were down by more than 70% from a year earlier after airlines cancelled or delayed plans for new planes.

The company said it had received just 20 orders during the month compared with 67 last May.

Earlier this year, Boeing said it would cut 6% of its workforce or 10,000 jobs.