With oil approaching $100 a barrel, the airlines are feeling the pinch. American has already raised some prices $20. However, United Airlines (UAUA) might be going one step further and grounding some of their fleet to cut costs.
"Either the industry passes on the higher fuel prices or we're going to have to lower capacity, but you have to make the equation work," said United Airline’s Chief Financial Officer Jake Brace.
The Chicago based carrier might ground up to 100 of their 460 mainline planes to cut costs. Nearly a fifth of United’s fleet is debt free, giving them the option to ground those planes to cut capacity.
United is looking at keeping capacity growth fairly flat at just 1 percent next year. Cuts in domestic capacity will be offset by increases in international traffic.
Maybe merge with Delta... apparently they are looking for a partner.
The Boston Globe
Potentially grounding 100 out of their 460 planes? Yikes, that's a rather hefty amount...things must be worse than implied if they're seriously considering doing that.
I wonder if Air Canada has any similar plans up here...they've certainly not had the greatest of times so far since the turn of the century.
Posted by: The Toronto Traveler | November 8, 2007 6:17 PM | Permalink to Comment