UAL Corp's United Airlines, the world's second-largest carrier, will cut its fleet by about 70 planes and shut the low-fare Ted unit to counter record fuel expenses, a person familiar with the plan said.
The reductions will take effect later this year, adding to the 30 aircraft taken out of service and 1,100 job cuts that United announced in April, the source, who asked to remain anonymous, told Bloomberg News.
The second round of cutbacks in two months at Chicago-based United reflects the strain of jet fuel's 76-percent surge over the past year. The Ted unit, which started in 2004 as a low-fare competitor, will join more than a dozen carriers in the United States, 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 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.
United plans to ground about 64 Boeing 737s and six Boeing 747s by the end of 2009, according to the person. Aircraft the company owns will be taken out of service and later sold.