Carrier will cut domestic capacity up to 18 percent

United Airlines, which had already announced plans to take 30 Boeing 737s out of service this year, now says it will ground a total of 100 planes from its mainline fleet, so that by the fourth quarter of this year, its domestic passenger capacity will be reduced by 14 percent from the same period a year ago. By 2009, United said, its mainline domestic capacity will be 17 top 18 percent less than in 2007, and overall capacity will have shrunk by 9 to 10 percent. “The company expects to retire all of its 94 B737s, provided it can work out terms with certain lessors, and six Boeing 747s,” a spokesman said. United said the fleet shrinkage is necessary to cope with what it called an “unprecedented fuel environment,” and to “reflect the current market reality.”

As part of the strategic pullback, United said it will eliminate its “Ted” product, a single-class sub-brand launched a few years ago to compete against low-cost carriers, mainly in leisure markets. The company said Ted’s 56 Airbus A320s will be reconfigured to mainline standards by adding a first class section, beginning in spring of 2009 and continuing through the year. As for the elimination of the 100 mainline aircraft, United said 80 should be gone this year and the last 20 in 2009. “Schedule changes will be principally accommodated through modest reductions of underperforming markets and through frequency reductions, while retaining a commitment to all five U.S. hubs,” United said. As part of the downsizing, the company plans to cut 1,400 to 1,600 management and contractor jobs, as well as a still-undetermined number of front-line employees.

In its traffic results for May 2008, United said its overall load factor was 82.6 percent, but the number of flights it operated declined by 4.4 percent from May 2007, and the number of passengers boarded dropped by 6.7 percent. Domestic capacity dropped by 5.5 percent, while transatlantic capacity rose 10.8 percent year over year.