Big Carriers Cut Costs Less Than Planned

The biggest U.S. airlines cut costs by $12.7 billion -- far less then they had planned -- at the most turbulent point of the industry downturn while discount carriers boosted expenses and attracted substantially more business, a report by the Government Accountability Office showed.

Seven large airlines, including American Airlines, United Airlines and Delta Air Lines, had told Congress they hoped to save $19.5 billion between October 2001 and the end of last year. But the actual savings was $12.7 billion, equal to a 14.5% reduction in operating expenses.

Low-cost airlines reported little cost cutting, and their operating expenses increased $1 billion, or about 10%, over the two-year period.