United Airlines is grounding 100 aircraft from its mainline fleet ” cutting domestic capacity by around 17%-18% and international by 4%-5% - by the end of 2009 and laying off between 1,400 and 1,600 staff this year as it struggles in the face of record high oil prices.
It plans to retire all of its 94 Boeing 737s and six 747s, ridding it of its less fuel efficient jets and lowering the company”s average fleet age to 11.8 years. This will mean ”modest” cuts on underperforming routes through frequency reductions, while retaining a commitment to its five main US hubs. About 80 aircraft are expected to be out of the system by the end of 2008.
”Today we are taking additional, aggressive steps that demonstrate our commitment to size our business appropriately to reflect the current market reality,” said United chairman, president and CEO Glenn Tilton. ”This environment demands that we and the industry act decisively and responsibly. 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 is also eliminating its economy-only Ted service, reconfiguring that fleet”s 56 Airbus A320s to include First class seats from spring 2009.
Up to 1,600 staff will lose their jobs ” that includes the 500 cuts already announced in April - by year-end.
These changes will offset a ”$3bn challenge” posed by inflated fuel bills by 2009 ”assuming the industry as a whole takes similar actions” read United”s statement.
”[This] is a significant step leading to a more effective and efficient operating fleet for United in the years ahead,” said United executive vice president and chief operating officer John Tague.