UAL Corp.'s United Airlines, the world's second-largest carrier, said Wednesday it will shut its low-fare Ted airline, ground 100 fuel-inefficient planes and cut 1,400 to 1,600 salaried management jobs to help counter record fuel costs.
This environment demands that we and the industry act decisively and responsibly, said CEO Glenn Tilton in a prepared statement.
The Chicago-based airline said it plans to reduce domestic mainline capacity by 17 percent to 18 percent, and will determine the number of front-line employee reductions as it finalizes the schedule in the next month.
Among the casualties will be United's leisure-oriented Ted unit. Ted's 56 Airbus A320 aircraft will be reconfigured in 2009 to include first-class seats.
The airline will remove 100 aircraft from its mainline fleet, including 30 previously announced Boeing 737s. The company said it expects to retire all 94 of its B737s if it can come to terms with certain lessors, and six Boeing 747s.
The airline will reduce cumulative consolidated capacity by 9 percent to 10 percent by the end of 2009.
Today we are taking additional, aggressive steps that demonstrate our commitment to size our business appropriately to reflect the current market reality, leverage capacity discipline to pass commodity costs on to customers, develop new revenue streams and continue to reduce non-fuel costs and capital expenditures, Chairman and CEO Glenn Tilton said in the release.
This environment demands that we and the industry act decisively and responsibly. At United, we continue to do the right work to reduce costs and increase revenue to respond to record fuel costs and the challenging economic environment.