United Airlines is reducing its fleet by 15 to 20 airplanes by the end of this year, the company said Tuesday.
Chicago-based United, the largest carrier at Denver International Airport, plans to sell some of its Boeing 737-500 planes. United said its fuel costs could increase by more than $1 billion this year.
High fuel costs and an uncertain economic environment have caused other carriers, including Delta Air Lines and Denver-based Frontier Airlines, to pull planes from their fleets. Frontier chief executive Sean Menke said during a JP Morgan conference in New York on Tuesday that Frontier is close to completing the sale of four airplanes and plans to slow its growth to between 3 percent and 5 percent for the fiscal year ending in March 2009.
The planes to be sold make up about 4 percent of United’s fleet of 460 planes and are “older, less fuel-efficient, narrow-body aircraft,” according to United.
United has been shrinking its domestic flight schedule, including at DIA. The airline said earlier this year it would again cut its domestic flight capacity and may make further adjustments.
Menke said he expects United’s seat share at DIA, a measure of its capacity compared with other airlines, to drop below 50 percent in the June quarter for the first time.
United did not announce a workforce reduction along with the fleet reduction, but United spokeswoman Jean Medina said “that’s something we’ll continue to look at to ensure we have a labor force that matches the size of our operation.”
In a message to employees, United chief executive Glenn Tilton said, “The economic environment in which our industry operates has changed significantly over the past several weeks. Continued uncertainty about the overall U.S. economy with the price of fuel at historically high levels has put significant pressure on all U.S. carriers.”
Steve Wallach, leader at the Air Line Pilots Association at United, said in a written statement that “shrinking the airline to achieve profitability has been demonstrated to be a failed business practice.”
United said it has been looking for new sources of revenue, such as through its $25 fee for checking a second bag for many of its customers, and has increased its fuel hedges. It is also looking for ways to reduce other costs.
Kelly Yamanouchi: 303-954-1488 or kyamanouchi@denverpost.com
