United Airlines (and Others) Hammered by Fuel Costs

CNN.com is reporting that United Airlines will ground 100 flights and cut 1,600 jobs because of high fuel prices. A Bloomberg article has different numbers. The Bloomberg article reads:

The second round of cutbacks in two months at Chicago-based United follows a 76 percent surge in jet fuel in the past year and a decision by American Airlines to reduce domestic capacity by 12 percent. The Ted unit, which started in 2004 as a low-fare competitor, will join more than a dozen carriers in the U.S., Asia and Europe that have collapsed in the past six months.

“Some of these capacity cuts are being done with the precision of a chainsaw,” said Michael Boyd of Evergreen, Colorado-based consulting firm Boyd Group. “You can’t just park planes and cut routes. It has to be the right kinds of planes on the right routes.”

The airline will announce additional cuts among management and salaried workers, the person said, adding that the number of unionized, front-line workers who will lose their jobs hasn’t been determined. United has about 52,500 employees.

Other airlines, such as Delta, have made similar cutbacks. UA has already instituted a new checked-baggage policy to deal with high fuel costs.

Despite the clear trajectory of high fuel prices and their obvious effects on working families, one can only guess what the U.S. economic landscape will look like in ten years. We are moving into uncharted waters. Don’t believe me? Check out Newsweek’s cover article on the “The Coming Energy Wars.”