UAL, AMR forecast more capacity cuts in 2009

NEW YORK (MarketWatch) — The owners of United Airlines and American Airlines said Wednesday said they would offer fewer flights due to deteriorating passenger demand and continued fuel volatility and the pair reported steep fourth-quarter losses

The comments followed steep fourth-quarter losses at United’s UAL Corp. and American’s AMR Corp. driven by less travel demand in the wake of the recession and fuel-hedging losses.


Both companies said they planned to cut their seat capacity further in the first quarter and throughout 2009 to meet the weaker demand, cut costs and strengthen airfares. UAL added it would also cut 1,000 jobs on top of the 1,500 positions previously announced, reducing its workforce by nearly 30%.

…For the current year, UAL has a targeted fuel consumption hedge at an average price of $53 a barrel.

AMR said it will also reduce capacity in 2009, trimming out 6.5% of its seating before the end of the year compared to 2008. That includes a domestic reduction of about 9%.

MarketWatch