United Airlines Seeks To Avert Economic Downturn By Cutting Jobs, Grounding Planes

June 4, 2008 10:08 a.m. EST

Chicago, IL (AHN) - Amid the global aviation industry's expectations of a major downturn due to soaring fuel prices, United Airlines announced layoffs of over 1,000 employees and the grounding of 100 jets on Wednesday.

Affected by the job cuts are salaried, management and contract workers who would lose their work by end of the year. UAL has already planned an initial 500 job cut outside of the new 1,000 forthcoming layoffs.

UAL's least fuel efficient airplanes, including Boeing jumbo jets, would be sidelined together with a 17 percent reduction of its domestic capacity.

A merger with US Airways was planned by UAL but the plans had to be set aside since an expected decrease in air travelers due to rising ticket cost would make large-scale corporate mergers uneconomical for the meantime.

The Boeing jets being retired have been flying the skies for the past two decades. Robert Mann, an aviation consultant, told the Chicago Tribune, "Aging goes hand-in-hand with fuel inefficiency... At these fuel prices, more and more of the domestic network is uneconomic."