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Oil price forces American Airlines to scrap 75 planes
Andrew Clark, Guardian
The rocketing price of a barrel of oil has prompted American Airlines to make swingeing cuts to its aircraft fleet, workforce and timetable in a sign of the severity of the cost storm gathering over the global aviation industry.
The world’s largest airline intends to scrap 75 planes and will reduce the number of seats available on domestic routes by between 11% and 12% this year. An unspecified number of jobs will be lost from AA’s 85,000-strong payroll as the airline closes and merges facilities.
The downsizing is AA’s sharpest since the aftermath of the terrorist attacks of September 11 2001. On Wall Street, the company’s shares plunged by 16% to a three-year low of $6.93.
Speaking at AA’s annual meeting in Texas, chief executive Gerard Arpey said: “The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel, and certainly not when record fuel expenses are coupled with a weak US economy.”
Airlines around the world are struggling to cope with oil prices which have pushed the cost of aviation fuel to record levels
(21 May 2008)
American Airlines’ plan to save the planet
Andrew Leonard, Salon
… According to the Wall Street Journal, in the first quarter of 2008, American “paid $665 million, or 45 percent, more for fuel than last year, while revenues increased by only 5 percent.” The industry as whole could lose more than $7 billion in 2008.
This is bad news for people accustomed to hopping a flight to see their relatives or attend a business meeting on a moment’s whim. American is canceling flights, raising ticket prices, and charging additional fees to passengers who want to check baggage. If oil prices stay high, you can figure that other airlines will do the same.
But could it be good news for the planet?
… The woes of the airline industry seem to offer a good example of how the pressures of peak oil could work at cross purposes to the forces that contribute to global warming. If the price of oil stays high, or skyrockets even higher, either the airlines will figure out how to use less fuel, or people will fly less. One way or another, emissions will fall.
(21 May 2008)
Airlines’ Cuts Making Cities No-Fly Zones
Micheline Maynard, New York Times
Earlier this decade, city officials in Hagerstown, Md., started making the case to build a longer runway at their airport to lure service by regional jets, instead of the turboprop planes that provided its only flights.
Several years and $61.4 million later, the city opened its concrete welcome mat, a new 7,000 foot runway, last November – two months after the airport lost scheduled air service altogether.
Despite its costly investment, a dogged marketing effort by local officials and even help from Congress, the airport has had no luck attracting a new carrier, as the industry struggles under soaring fuel prices.
(21 May 2008)
American to charge for 1st checked bag, cut flights
David Koenig, Associated Press
American Airlines will start charging $15 for the first checked bag, cut domestic flights and lay off possibly thousands of workers as it grapples with record-high fuel prices.
American plans to cut domestic flight capacity by 11 percent to 12 percent in the fourth quarter, after the peak summer season is over. That’s more than double American’s previous plans to cut flying by 4.6 percent in late 2008.
… The changes were being made to adapt to “the current reality of slow economic growth and high oil prices,” Arpey said. He said the fees are an effort to get customers to pay for services they want.
(21 May 2008)
