Airlines pursue cuts, new fees to stay afloat

DALLAS - Airline executives are continuing to cut jobs and consider new passenger fees as they battle high fuel prices that could result in record losses for the nation's carriers.

Executives from United Airlines gave more details on plans to shed up to 1,600 salaried jobs at an investors' conference in New York yesterday.

Chief financial officer Jake Brace said United would also cut union jobs - pilots, flight attendants and mechanics - once the airline draws up a scaled-back flying schedule for fall and winter.

Delta Air Lines Inc. said it would cut domestic capacity an additional 3 percent later this year, on top of a previously announced 10 percent reduction. The carrier said this year's fuel costs would rise $4 billion from 2007.

US Airways Group Inc. president Scott Kirby said the airline could handle fuel costs a bit better if it were not for labor agreements that dictate the kind of flights it offers. Kirby said Philadelphia's dominant carrier could trim 2 percent to 4 percent in seating capacity if it did not have pilot and flight attendant contracts in place. But Kirby said that was not much more for an airline that is facing almost $2 billion more in fuel costs this year.

Continental Airlines Inc., which boasts that it still serves meals in coach, is studying whether to join carriers charging to check a first bag, according to its chief executive officer.

The lone profitable big carrier so far this year, Southwest Airlines Co., still expects to grow modestly through next year, but that is not a sure thing.

"If we have to slow our growth to zero next year, we're obviously prepared to do that," Southwest CEO Gary Kelly said at the investors' conference.

The common threat to all the carriers is the cost of fuel, which has risen for years and nearly doubled in the last 12 months.

On Tuesday, the Air Transport Association, a trade group for the big airlines, warned that the industry could lose a record $13 billion this year.

Forecasts like that have renewed talk that big airlines could face bankruptcy by early next year unless fuel prices fall or fares rise sharply.

Delta provided a speck of encouraging news yesterday, saying it expected to post a second-quarter profit, excluding onetime items. Delta lost $6.4 billion in the first quarter, although $6.1 billion was an accounting charge to write down the value of its assets. (AMR Corp. said yesterday that it would take a write-down, but it did not give a figure.)

Carriers are responding to high oil prices by raising fares nearly two dozen times this year and increasing fees for everything from toting pets on board to changing itineraries.

American took "a little bit of flak" for imposing a $15 fee on the first checked bag, said Gerard Arpey, the CEO of American Airlines and parent AMR. But United and US Airways matched it, and Continental is considering it, too, although Continental CEO Lawrence Kellner said he worried about boarding delays as customers try to stuff more into their carry-ons.

Airlines also have announced plans to ground dozens of jets and eliminate many flights once the peak summer travel season ends.