American Airlines to cut flights

American Airlines said Wednesday it was cutting domestic flights and hiking certain fees as it battles to offset rocketing crude oil prices.
The largest US carrier said it planned to slash its domestic flight capacity by up to 12 percent during the fourth quarter of the year and to retire at least 75 aircraft in the face of spiking jet fuel costs.
The airline's parent firm AMR Corp. said its moves would lead to an unspecified number job losses at American Airlines and American Eagle Airlines and could result in the closure of some facilities.
"The airline industry as it is constituted today was not built to withstand oil prices at 125 dollars a barrel, and certainly not when record fuel expenses are coupled with a weak US economy," said AMR chairman and chief executive Gerard Arpey.
American announced its overhaul as world oil prices jumped to new all-time peaks Wednesday, smashing the 130-dollar barrier for the first time.
Arpey said the company's management could not afford to sit by hoping that oil prices would fall anytime soon.
The double-digit cut to its domestic schedules marks an aggressive acceleration from a prior stance in April when the company had said it was expecting to reduce capacity by 4.6 percent.
Arpey said the flight reductions would help American Airlines to cut its costs.
The airline anticipates retiring 40-45 aircraft, which will mostly be MD-80s, but will also include the mothballing of some Airbus A300 jets. It also plans to retire 35-40 regional jets and some turboprop aircraft.
In a bid to boost its pinched revenues, Arpey said American was introducing a new 15-dollar fee for each passenger's first checked bag, although business and international flyers and customers who buy full-fare tickets will be exempt from the fee.
Fees, covering reservation services, pet transportation and oversized bags, will meanwhile be increased from five to 50 dollars depending on the service.
The carrier said the fee hikes would generate increased revenues.
American paid 665 million dollars more for fuel during the first quarter of this year compared with last year. Its January-March fuel bill surged 45 percent on an annual basis.