With fuel prices taking off, U.S. airlines ground domestic flights

By Micheline Maynard
The New York Times

Big airlines have complained over the past few years that the industry was awash in seats. But despite deep financial losses, none wanted to reduce capacity, given the heavy demand for travel.

Now, quickly rising fuel prices are forcing airlines to act, even though planes are as full as ever. Along with raising fares, the big airlines are beginning to retire less efficient planes and reduce domestic service.
The overall capacity of some airlines will still rise, because they are shifting aircraft to overseas flights. For example, United Airlines, a unit of UAL, which has been in bankruptcy protection since December 2002, is cutting seats within the United States by 12 percent, even as it expands its flights overseas with new routes to Asia and Latin America.

Still, United has cut its fleet by 69 planes since last summer and shifted some to its low-fare airline, Ted, and its regional U.S. carrier, United Express.

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