Struggling United to phase out Ted
United Airlines, one of the largest carriers at Los Angeles International Airport, said Wednesday that it would eliminate its low-fare Ted service, ground an additional 70 planes and pare up to 1,100 more jobs in response to soaring fuel costs.
The planned cuts are among the latest by airlines as they struggle with fuel prices that have jumped 70% since last year, leaving the industry facing billions of dollars in losses.
Last month, American Airlines, the largest U.S. carrier, said it would cut as much as 12% of its domestic flights in the fourth quarter by retiring at least 75 older, fuel-guzzling aircraft. On Wednesday, Delta Air Lines, which had already announced a 10% reduction in its flights by year’s end, said it too was weighing further cuts.
The bottom line for passengers is even more crowded airplanes and rising fares with no end in sight, analysts said.
Some fares on routes with little competition are up by as much as $340 for the round trip, said Tom Parsons of travel website bestfares.com. Flying this summer, particularly on a nonstop, “will cost you a pretty penny,” he said.
For its part, United, the primary subsidiary of Chicago-based UAL Corp., said the moves were needed to help it weather an “unprecedented fuel environment.”
In all, United plans to pare about 18% of its flights by the end of next year as it grounds a total of 100 aircraft -- including all of its 94 Boeing 737s and six Boeing 747 jumbo jets. It currently has a fleet of 460 planes.
With previously announced cuts, the airline said it expected to pare a total of 1,600 jobs, or about 3% of its workforce.
In a message to employees, United executives said the cuts would be achieved over time, principally through culling flight schedules with “modest reductions in routes and destinations.” Flight schedule changes associated with the additional fleet cuts will be “completed in the near future,” the carrier said.
But the airline hinted that cutbacks at LAX were likely to be minor. While the biggest cuts are expected in what United calls “underperforming markets,” the airline is “retaining a commitment to all five U.S. hubs, the airline said. LAX is considered one of the airline’s major hubs.
LAX officials said Wednesday that they had not yet received any information on which routes from LAX and Ontario International Airport would be affected. United accounts for about 15% of all passenger traffic at LAX. Last year, it flew more than 9 million passengers at LAX for domestic and international travel.
The largest effect could come from shutting down the airline’s Ted service, which was formed while the carrier was in Chapter 11 Bankruptcy Court protection shortly after the September 2001 terrorist attacks jolted airline travel. Ted, with its own fleet of 56 A-320s in an all-economy-class seating configuration, was started to compete against such discount airlines as Southwest and JetBlue.
Ted has nine daily departures from LAX, six of them to Las Vegas. It also has five daily departures from Ontario, with the only Denver service from the airport. A United spokeswoman said that those routes may be picked up by the airline as Ted service is phased out by the end of next year.
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