United Airlines says its going to ground 20 planes in an effort to save on fuel costs, says CNNMoney.
The nation’s second-largest carrier said Tuesday it will ground and sell back to lessors 15 to 20 older, narrow-body 737s that are less fuel-efficient than others in its 460-plane fleet. It did not immediately specify what domestic flights or routes could be trimmed.
UAL Corp.’s (UAUA, Fortune 500) United, like other airlines, has grown more aggressive in passing on higher fuel costs to customers. It raised ticket prices by as much as $50 per round trip last week — an increase matched by other carriers. Airlines are also adding fees for some offerings including, at United, a $25 fee for checking a second bag.
It remains to be seen whether that will be enough to stem the fuel cost setback without cutting jobs.
Meanwhile, Delta offered severance packages to some 30,000 employees and cut its fleet back 5%, also blaming fuel costs. BusinessWeek speculates that once merger-happy United might be better off ridding itself of CEO Glenn Tilton and finding someone eager to create a profitable airline:
Over the past two years, Tilton has chanted a mantra that airline industry consolidation is inevitable. To help that along, he has been squeezing every possible dime out of existing operations by postponing orders for new aircraft or refusing labor an extra nickel. There’s no need to invest for the future, he seems to be thinking, if you’re going to be gone anyway.
The fruit of his efforts? Employee morale is now worse than ever, especially among the pilots, who are openly hostile to Tilton’s regime. What’s more, United’s customer satisfaction levels are tumbling. Of the top 20 U.S. airlines, United had more customer grievances last year than any other except US Airways (LCC). Making passengers pay a $25 bounty for toting an extra bag on board is hardly going to help.
So, is there anyone out there who wants to run an airline?