United cuts staff, planes to save money

June 4, 2008 9:49:17 AM PDT
United Airlines said Wednesday that it's cutting up to 1,100 more jobs, removing an additional 70 fuel-guzzling airplanes from its fleet and slashing domestic capacity as it tries to cope with spiraling fuel prices. The nation's No. 2 carrier said it plans to cut an additional 900 to 1,100 salaried, contract and management employees by the end of the year, in addition to 500 previously announced job reductions. The combined reductions mean the airline is cutting nearly 3 percent of its 55,000 workers worldwide.

Officials said the "aggressive" moves are designed to the help the subsidiary of UAL Corp. weather an "unprecedented fuel environment." Crude oil futures prices peaked at a record above $135 a barrel nearly two weeks ago and airline fuel prices have been rocketing higher as well.

"This environment demands that we and the industry act decisively and responsibly," Glenn Tilton, United's chairman, president and CEO, said in a statement. "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."

United said it plans to ground its entire fleet of 94 Boeing B737s as well as six of the company's 747s -- its oldest and least fuel-efficient planes. It previously said it was going to mothball 30 of the jets. It is also scrapping its coach-only "Ted" service and reconfiguring those planes to include first-class seats.

And the Chicago-based carrier will cut mainline domestic capacity by 17 to 18 percent in 2009, while also scaling back international capacity by 4 to 5 percent.

"The decision to dramatically reduce our capacity profile, particularly in the domestic marketplace, while over time eliminating a fleet type, is a significant step leading to a more effective and efficient operating fleet for United in the years ahead, while improving our customer experience and reliability," Chief Operating Officer John Tague said in a statement.

The nation's airlines are struggling amid the record-high fuel prices and slashing capacity and jobs while charging customers extra fees.

American Airlines announced last month that it would cut workers and slash its domestic flight capacity by 11 percent to 12 percent in the fourth quarter, after the peak summer season is over. The carrier was previously planning a 4.6 percent cut.

And the subsidiary of AMR Corp. said it would charge passengers $15 for the first checked bag.

Meanwhile Delta Air Lines Inc. is reducing capacity and trimming thousands of jobs.

UAL shares, which have plummeted this spring, rose 91 cents, or 10.7 percent, to $9.44 in midday trading Wednesday.


Load Comments