Airlines might ground planes, cut schedules

The Fort Worth Star-TelegramMarch 10, 2009 

The major airlines may soon announce more plans to cut schedules and park jets, some analysts believe, as a decline in travel demand accelerates.

Passenger traffic on the major carriers dropped by more than 12 percent last month, and results were even worse on crucial international routes.

"It is clear that international business travel is at the bad end of the travel demand spectrum," said Kevin Crissey, an airline analyst with UBS, in a report to investors. "We anticipate announcements of additional [passenger] capacity cuts as early as next week."

More cuts could mean additional layoffs for airline employees, as smaller schedules reduce the number of pilots, flight attendants and ground workers needed. Broad reductions also would mean fewer flights available for passengers, and some smaller cities could lose nonstop service to popular destinations.

The airlines have already been making significant cuts to their networks, which began last year when oil prices spiked. Fort Worth-based AMR Corp., parent of American Airlines, cut its passenger capacity by 8 percent last year and is planning to shrink by an additional 6 percent this year.

Dallas-based Southwest Airlines will cut its schedule by 4 percent this year, the first reduction in the airline’s history.

Other airlines, including Delta Air Lines and United Airlines, have also made significant cutbacks. But many industry observers believe that the swift drop in demand means that more cuts are required.

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