United To Ground 70 Planes, Cut 1,100 Jobs
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UAL Corp.’s United Airlines, the world’s second-largest carrier, will shut its low-fare Ted airline, ground 70 planes and cut as many as 1,100 jobs as surging fuel prices extend an industrywide contraction. United’s second set of cutbacks in two months is a response to a projected $3 billion boost in its 2008 fuel bill. American Airlines and Delta Air Lines Inc. also are paring their domestic schedules to blunt losses that may total a record $7.2 billion this year.
“These are very aggressive domestic capacity and cost cuts,” Calyon Securities analyst Ray Neidl said of United’s moves. “If oil stays at $130 or $120 a barrel, I expect you’ll see additional big cuts.”
UAL rose 7.2% after unveiling the reductions, which amount to 15% of its main jet fleet. The planes will be retired this year and next, adding to the 30 jets taken out of service and 500 management job cuts disclosed in April.
