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Wednesday, July 23, 2008

United Airlines to slash 7,000 jobs by 2009

UAL's United Airlines, one of the world's largest carriers, said Tuesday that it would cut more than 7,000 jobs by the end of 2009 to stem losses from record fuel bills.

The reductions consist of 5,500 aircraft and airport workers and 1,500 previously announced salaried positions, UAL said in a statement. The Chicago-based carrier disclosed the cuts as it reported a second-quarter net loss of $2.73 billion to write down the value of assets.

UAL's deficit pushed the collective loss among the three biggest U.S. carriers to $5.22 billion, following last week's reports by AMR Corp.'s American Airlines and Delta Air Lines. Jet fuel averaged 80 percent more than a year earlier, outpacing fare increases and new fees.

"Our industry is challenged as never before by the unrelenting price of oil," Glenn Tilton, the chief executive, said in the statement.

Excluding $2.6 billion in charges for the writedown and severance, the loss was $151 million, or $1.19 a share, UAL said. Year-earlier earnings were $274 million, or $1.83 a share.


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Friday, June 27, 2008

United to lay off 950 pilots, slash fleet

UNITED Airlines, the only US carrier offering non-stop flights between Australia and the US mainland, will lay off 950 pilots and reduce its fleet by 100 aircraft as the airline industry reels from the effect of high fuel prices.

The decision by a major carrier to lay off about 15 per cent of its pilots comes as US aviation experts, including former American Airlines chief Bob Crandall, warn that at least one big airline may go under.

It also comes as a US House Committee is due to discuss a report by the Business Travel Coalition warning that airline liquidations could cripple the US economy, costing between 30,000 and 75,000 direct jobs and resulting in payroll losses of $US2.3-6.7 billion ($2.4-7 billion).

The report predicts that losses would ripple through communities, endanger businesses that depend on airlines, devastate tourism and affect businesses that rely on just-in-time freight.

It also forecasts a decline in business activity because of disruption to travel, falling tax revenues and increased government outlays in areas such as unemployment benefits.

Another study, by Airline Forecasts, says oil prices of $US130-140 a barrel could result in the loss of 75,000 to 80,000 jobs, including about 11,500 pilots.

United's announcement this week came on top of a previous announcement that it would slash fleet operations and up to 1100 salaried and management jobs to offset higher fuel bills and a weakening US economy. Those lay-offs, from a workforce of about 55,000, were in addition to 500 already announced.

The airline plans to slash domestic capacity by 14 per cent by the fourth quarter of this year and total capacity by 8 per cent.

Over 2008-09, cumulative mainline domestic capacity will be reduced by 17-18 per cent and consolidated capacity by 9-10 per cent.

This involves retiring an additional 70 older aircraft, on top of 30 already targeted, and shrinking the fleet to about 360 planes by next year.

The retirements involve all 94 of its Boeing 737s and six Boeing 747s.

"As we reduce the size of our fleet and take actions companywide to enable United to compete in an environment of record fuel prices, we must take the difficult, but necessary step to reduce the number of people we have to run our business," the airline said.

In a message to the aviators, Keith Rimer, the airline's chief pilot, said that because of the number of pilots on military and personal leave, furlough notices would be sent to more than 1400 of the airline's least senior pilots in order to cut the active roster by 950.

The carrier was talking to unions about the lay-offs and said affected pilots would be notified in mid-July. The lay-offs are due to start in September.

It also announced a plan for global co-operation with Continental Airlines that would see the latter join the giant Star Alliance and the two carriers link their networks and services.

The airlines said last week the move would create revenue opportunities, but noted it would also result in cost savings and "efficiencies".

A United spokesman in Australia said the cutbacks were unlikely to affect Australian services as most of the aircraft being grounded were Boeing 737s.

Earlier this week in Sydney, the airline unveiled new business and first-class seats it was introducing across its fleet of Boeing 747s, 767s and 777s. But a spokesman said there was no time line for that at this stage.

However, the roadshow coincides with the introduction on the trans-Pacific of new Boeing 777s by Virgin subsidiary V Australia and the arrival on the route of Qantas's flagship A380s.

The new United business cabins will feature the kind of lie-flat sleeper seats and video-on-demand systems that have been available on other airlines for several years.

Other major airlines also have announced plans in recent weeks to shrink their operations, ground older aircraft, defer deliveries of new planes on order and cut jobs.

Delta Air Lines shed 4000 jobs through voluntary buyouts.

American Airlines, Continental Airlines and US Airways Group also have announced plans for reducing their head counts and fleets.



Sunday, June 22, 2008

United Airlines to require minimum stays from Oct.

United Airlines said Friday it will start requiring minimum stays for nearly all domestic coach seats beginning in October. It is also raising its cheapest fares by as much as $90 one-way.

The second largest U.S. carrier said the moves are among a number of changes, including flight and job cutbacks, it is making to combat record high fuel prices.



Saturday, June 21, 2008

Continental to join United in Star Alliance

Continental Airlines and United Airlines on Thursday announced a broad partnership to link their services worldwide aimed at cutting costs as the industry reels from soaring fuel prices.

As part of the tie-up, Continental plans to join United in the Star Alliance of carriers, the two companies said in a joint statement.

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Friday, June 13, 2008

United Airlines to charge 15 dollars to check one bag

NEW YORK (AFP) - United Airlines said Thursday it will charge a 15 dollar service fee to check one bag for domestic travel on an economy ticket to help offset record fuel prices.

The new fee also will be charged on economy travel to Canada, the US Virgin Islands and Puerto Rico, said the second-largest US airline, owned by UAL Corporation.

In addition, the Chicago based carrier said it will hike the fee to check three or more bags, overweight bags or items that require special handling to 125 dollars from 100 dollars, or to 250 dollars from 200 dollars, depending on the item.

The new fees, effective August 18, apply to customers who purchase a ticket on or after Friday.

The airline previously announced a fee of 25 dollars for checking a second bag.

United estimates the potential revenue from baggage handling service fees, including those for checking a first and second bag, will be about 275 million dollars a year.

It announced exceptions to the new first-bag checking fee for passengers traveling in United first or business class, certain frequent-flyer and Star Alliance members and US military personnel traveling on orders.

Like other US airlines reeling from jet fuel prices that have nearly doubled in the past year and a soft US economy, United announced in early June it was further cutting its fleet, operations and up to 1,100 additional jobs. It also closed its budget carrier Ted.

The leading carrier American Airlines took similar action to stem losses from the fuel crisis in mid May and announced a 15 dollar for fee for the first checked bag on tickets purchased for domestic economy travel on or after June 15, and 25 dollars for the second checked bag.


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Thursday, June 05, 2008

United Airlines cuts 100 planes

US carrier United Airlines is to ground 100 of its planes and cut between 900 and 1,100 jobs, in addition to 500 already announced lay-offs.


Sunday, June 01, 2008

United Airlines, US Airways drop merger talks

United Airlines and US Airways said Friday they have stopped discussing a possible merger and will go it alone, doing business in an onerous economy with crude oil in the $130-a-barrel range.

The nation's second and fifth largest airlines began talks in late April, after Continental Airlines had rejected United Airlines' merger overtures. The three airlines had been weighing consolidation as an option since mid April, when Delta Air Lines and Northwest Airlines proposed a deal that would create the world's largest carrier.

Glenn Tilton, the chief executive of United Airlines, and his counterpart at US Airways, Doug Parker, both wrote statements to their employees on Friday saying consolidation will not take place "at this time."

Tilton said the deal was dropped "due to issues that could significantly dilute benefits from a transaction."

"The U.S. (airline) industry is facing a $20 billion increase in fuel (prices), and United, at current prices, is looking at a $3.5 billion increase over last year," Tilton wrote. "It's clear that the status quo is not sustainable. The magnitude of the challenge the industry faces demands unprecedented change."

United is the dominant carrier at San Francisco International Airport with 48 percent of the flights, and employs 10,000 people in the Bay Area.

US Airways' Parker wrote, "It is simply unlikely that anything will happen in 2008 as our industry continues to struggle with how to function in a world" with crude oil costing $130 a barrel.

Both executives remain advocates of consolidation in the airline industry, and thus left a door open.

They gave no reason for breaking off talks, but analysts believe a merger would be too problematic. The announcement almost certainly means there will not be another attempt by major airlines to merge before year's end.

There is a perception that the Justice Department of the Republican administration of President Bush would be more accommodating to a merger than would the department in place during a Democratic administration. Even so, Bush was in office in July 2001, when the Justice Department said it would oppose the first United-US Airways merger attempt, saying it created a near-monopoly on approximately 30 routes.

Henry Harteveldt, the airline analyst at Forrester Research in San Francisco, said Friday that he thinks it is a good thing for United to be pursuing independence for now. "A merger with US Airways would not have solved United Airlines' problems. It would not bring much to the table that United cannot do on its own," said Harteveldt.

"The products and the cultures are so different that had the two airlines merged, it would have been extremely problematic and potentially cost the airline business as corporate clients and others avoided traveling on the airline until things got sorted out," he said.

Harteveldt said United now "has to work on ways to grow its revenue and develop ways of serving more customers who are willing to pay the prices United will have to charge to earn a profit."

U.S. passenger and cargo airlines spent $16.4 billion on fuel in 2000 and $41.2 billion in 2007, and will spend a projected $61.2 billion in 2008, according to the Air Transport Association in Washington, D.C., representing the major carriers.

Six carriers have gone out of business since December: MAXjet, Big Sky, Aloha, ATA, Skybus and Eos. A seventh, Champion, quit business Friday and an eighth, Air Midwest, is to fold June 30. A ninth, Frontier Airlines, filed for bankruptcy protection April 11 but continues operating.

A British all-business airline, Silverjet, that served Newark, N.J., ceased flying Friday as well.


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Monday, May 26, 2008

United, US Airways delay China launch

Two airlines that only months ago won federal approval to begin highly coveted routes to China are postponing the launch of the new services because of high fuel costs.

The requests come at a time of growing strain on the airline industry, which is anticipating multibillion dollar losses this year as it scrambles to cope with runaway oil prices and a slumping U.S. economy.

United Airlines (UAUA, Fortune 500) has sought and US Airways (LCC, Fortune 500) plans to ask for one-year delays in launching the new routes, representatives from the carriers said Thursday. United won final approval and US Airways received the tentative go-ahead to launch the routes from the U.S. Department of Transportation in September.

Since then, oil prices have shot up more than 60%. Benchmark prices surged past $135 a barrel Thursday before settling at $130.81, down $2.36 on the New York Mercantile Exchange.

The routes in question affect planned United service between San Francisco to Guangzhou, and US Airways flights between Philadelphia and Beijing.

Access to routes between the U.S. and China is highly competitive because air service between the two countries is restricted by bilateral agreements. A July agreement between the two countries was intended to double the number of daily flights allowed between the two nations over the next five years.

United's request for a delay was approved April 25, while the request from US Airways has not yet been received, Transportation Department spokesman Bill Mosley said.

United, a division of UAL Corp., was scheduled to start its new flights in early June, but now plans to postpone the launch until June 2009. Spokeswoman Robin Urbanski said the Chicago-based carrier is scaling back plans for one new international route, San Francisco to Guangzhou, where there aren't "strong enough economics" to offset higher fuel costs.

United received final approval for its route in September, the same time Delta Air Lines Inc. (DAL, Fortune 500) won the opportunity to launch its first flights to China with a daily route between Shanghai and Atlanta. Delta's flights began March 31.

US Airways has begun sending letters to members of Congress and its employees saying it would seek to delay the launch of the new Philadelphia-Beijing route, noting that the cost for fuel would be more than $90 million a year - $40 million more than the original estimate of about $50 million.

"We're optimistic that economic conditions will be on the upswing in 2010, giving us a better chance of success with our first route to China," Scott Kirby, the president of Phoenix based US Airways Group Inc., said in a letter to workers.

Sen. Bob Casey, D-Pa., said in a statement that the China route is a priority for the Philadelphia region, and that the delay was another example of how high fuel prices are hurting the economy.

"I hope this delay is only temporary because this route has the potential to be an economic boon to Philadelphia and good business for US Airways," Casey said.

Before it began the process of delaying the launch, US Airways had planned to start its new route in 2009.

US Airways received final approval for the route in December. At the same time, AMR Corp.'s (AMR, Fortune 500) American Airlines, Continental Airlines Inc. (CAL, Fortune 500) and Northwest Airlines Corp. (NWA, Fortune 500) each won awards to add a new daily flight to their existing service beginning next year.

Representatives for American, Continental and Northwest said they are not making any changes to their plans for new China passenger routes next year.

However, Northwest has applied for a waiver to suspend seven weekly roundtrip cargo flights a week between Tokyo and Guangzhou, China, spokeswoman Tammy Lee said.


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Saturday, May 17, 2008

United Air Accidentally Drops $130 Fuel Surcharge

United Airlines said it accidentally dropped fuel surcharges of as much as $130 round trip on all of its domestic routes around midday today.

"It was a clerical error", spokeswoman Robin Urbanski said in a phone interview.

United won't be able to fix the glitch until the next fare distribution occurs at about 8 p.m. New York time, she said.


Friday, November 23, 2007

United Airlines looking for a merger: report

UAL Corp, parent of the No. 2 U.S. carrier United Airlines, is keen for a possible merger, according to an article in the Dec 3 edition of BusinessWeek that cited industry experts.


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Monday, July 23, 2007

United Airlines plans daily nonstop flights between China, California

United Airlines will apply to begin daily, nonstop air service between China and two California cities, said the company's Beijing office.

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Friday, July 20, 2007

Body found in nose of United Airlines plane at SFO

San Francisco International Airport personnel this morning discovered the body of a man in the wheel well of a 747 recently arrived from Shanghai, an airport official said.

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Friday, June 22, 2007

United Airlines works to return flights after computer glitch

A United Airlines computer outage forced the airline to stop all its takeoffs around the globe for more than two hours on Wednesday.

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Wednesday, April 04, 2007

United Air, bmi seek transatlantic operations link

BMI and United Airlines have made an application to the US Government to form an alliance that would merge their transatlantic operations.

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Thursday, March 22, 2007

United Airlines fined nearly $400K for air quality violations

Bay Area air quality regulators have fined United Airlines nearly $400 000 for ignoring pollution requirements and failing to ensure properly functions filtering equipment at its San Francisco International Airport maintenance facility.

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