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American Airlines to
cut flights, hike fees as oil prices spike
 Published: Wednesday May 21, 2008 |
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American Airlines 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.