United also said it is eliminating Ted, the Denver-based discount arm launched in 2004 to counter low-fare competitors like Frontier and Southwest. Ted caters to leisure travelers with only coach-class seating, but starting next spring, its 56 Airbus A320s will be reconfigured with United First-class seats.

United's also cutting large jet domestic flying by 14% in the October-December period and eliminating as many as 1,600 jobs. Its North American flying next year will be down at least 17% vs. 2007.

United is retiring all 94 of its Boeing 737s and six jumbo Boeing 747s.

It isn't the only carrier jettisoning unprofitable planes and routes. Excluding their regional airline flying, Delta has said it's cutting 10% of its capacity in the fourth quarter and American plans to cut 12% from a year ago. They hope to reduce costs and boost fares by shrinking the supply of seats.

Leisure travelers will be among those most affected by the sweeping reductions, said George Hamlin, an aviation consultant at ACA Associates. Many large airlines are trying to attract a more balanced mix of business and leisure travelers, instead of carrying a majority of lower paying leisure travelers, he says.

"You're not going to see very many $99 fares to California and $69 Northeast-Florida fares anymore," Hamlin said.

United didn't specify the changes to come this fall, but the company said in a statement the cuts will mainly take the form of fewer frequencies on some routes and "modest reductions of routes and destinations."

United serves more than 200 U.S. and international destinations. It says it's committed to preserving its five hubs at Los Angeles, San Francisco, Denver, Chicago O'Hare and Washington Dulles.

With the eventual disappearance of Ted, which this month serves 23 airports, passengers could lose some inexpensive flights to vacation spots. From its Denver base, for instance, Ted flies to Tampa and West Palm Beach, Fla.; Reno; and Puerto Vallarta, Mexico.

The Ted planes will be gradually folded back into the United system once they are outfitted with premium cabins to match the rest of United's mainline fleet.

Service between U.S. cities will see the deepest cuts, but United is also going to cut international capacity as much as 5% this fall and next year.

"While the vast majority of our international markets are performing quite well, there are a few markets that simply can't be profitable at today's fuel prices," said John Tague, United's chief operating officer, in a statement.

Fuel prices already foiled United's plan to launch nonstop service this month between San Francisco and Guangzhou, China — a route the airline had worked on securing for more than five years. In April, it postponed the flight for one year due to fuel costs.

During the April earnings call with Wall Street analysts, CEO Glen Tilton said that if oil prices stay over $110 a barrel, United's annual fuel bill will jump by "well over $2 billion" compared to last year when oil averaged $72 a barrel.

ADVERTISEMENT

Iconocast is about learning and teaching without borders; we offer eMarketing, Internet Advertising, Internet Marketing, Search Engine Optimization, Search Engine Marketing, Online Branding, and eMarketing News Services.

Iconocast Home Page

Contact Iconocast

© 2003-07. ICONOCAST is a trademark of iconocast.com.