United Airlines grounding 100 planes

Major US air carrier United Airlines has indicated that it will ground 100 of its aircraft and axe approximately 17% of its network, all by the end of 2008, as soaring fuel prices are causing the carrier to experience mounting losses.

Most of the new cuts will occur in the US, but United has said that it will also reduce its international network in 2009, by up to 5%. Services from Heathrow are not likely to be impacted by this network reduction initiative.

The cuts are not the end to the cost reduction efforts for United. Up to 1,100 jobs will also be lost, and this is in addition to the 500 redundancies that were announced in April.

Glenn Tilton, president and chief executive of United Airlines, has said: “We are taking aggressive steps that reflect the current market reality. This environment demands the industry act decisively.”

United’s move follows a move made by American Airlines last week, announcing a 12% reduction in flights.

The carrier withdrew from a proposed merger with its rival, US Airways, late last week, indicating that the costs involved would outweigh any savings, particularly during this period of deepening downturn in the airline industry.

www.united.com