Major airlines, including American, begin flight cutbacks

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http://www.dallasnews.com/sharedcontent/dws/bus/industries/airlines/stories=
/DN-airlinecuts_01bus.State.Edition1.41c1811.html

Major airlines, including American, begin flight cutbacks

11:16 PM CDT on Sunday, August 31, 2008

By TERRY MAXON / The Dallas Morning News
tmaxon@xxxxxxxxxxxxxx The Associated Press contributed to this report.

Fewer flights will be available to U.S. travelers this month as airlines be=
gin trimming their schedules to cope with high fuel costs and growing losse=
s.

But the real hit won't occur until November and December, as major carriers=
 make the deep cuts in capacity that they've been promising.

Aviation consultant Boyd Group estimates that flights by U.S. airlines will=
 decline 9.3 percent in November compared to a year earlier, which translat=
es to 9.6 percent fewer seats.

Boyd Group president Michael Boyd said the capacity reductions should be co=
mpleted by the end of 2009, but with an airline industry much different and=
 smaller.

"It'll find its level by the end of 2009," Mr. Boyd said. "That level will =
probably be 15 to 18 percent less capacity and about 15 to 20 percent highe=
r average fares" compared to 2008.

American Airlines Inc. and regional partner American Eagle will make their =
deepest cuts in their November schedules, although the reductions this week=
 will sharply shrink their San Juan, Puerto Rico, hub.

For most airlines, the reductions largely mean that they are flying fewer t=
imes on a route, Mr. Boyd said.

By the end of November, American will end its service to Oakland, Calif., L=
ondon Stansted and Barranquilla, Colombia. American Eagle will end service =
to Albany, N.Y., Harrisburg, Pa., Providence, R.I., San Luis Obispo, Calif.=
, and the Dominican Republic.

But for most of its cities, American will simply fly less often: one less f=
light from Dallas/Fort Worth to Boston, Charlotte, N.C., Washington Nationa=
l, Newark and Denver, for example.

As it parks airplanes and cuts flights, American plans to eliminate about 8=
 percent of its jobs or 6,500 to 7,000 positions. More than 900 flight atte=
ndants began retirement or temporary leaves at the end of August, and some =
layoffs have already occurred.

But the carrier is still working through its voluntary severance process wi=
th the Transport Workers Union, and it told the Allied Pilots Association i=
n August that 200 potential furloughs won't occur Oct. 1, as previously sug=
gested.

Mr. Boyd said the crisis in the airline industry hasn't gone away even thou=
gh oil prices have dropped well below their summer highs approaching $150 a=
 barrel.

"Man, when oil hit 115 bucks on the way up, we were doing obituaries on car=
riers. Now it's dropped to $115, and you'd think it was cheap oil again," M=
r. Boyd said.

Airlines "still got to adjust to that," which means they have to cut capaci=
ty to push prices up and eliminate marginal flights, he said.

"Ultimately, it all comes back to extraordinarily high fuel prices and the =
ensuing significant losses we've lost as a result of that," said American A=
irlines spokesman Tim Smith. "Even with the recent softening of oil prices =
somewhat, we are still way behind price-wise where we were in 2007, plus fu=
el prices remain very volatile."

The hope of airlines is that the cuts in capacity will allow them to raise =
fares with fewer discounts.

On average, domestic fares between metro cities are already up roughly 16 p=
ercent since Jan. 2, while fares between small cities are up roughly 37 per=
cent year-to-date, according to Rick Seaney, head of airfare research site =
FareCompare.com.

The changes starting this month come on top of a list of new charges =E2=80=
=93 for luggage, drinks, pillows and other amenities.

"Airline travel is airline travel =E2=80=93 it's been bad for a long time,"=
 Chris Bardasian, an American Airlines frequent flyer, told The Associated =
Press recently at Dallas/Fort Worth International Airport. "I suspect price=
s will go up, fewer people will travel, and if you're willing to pay the pr=
ice, it will be fine."

The Associated Press contributed to this report.

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