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United, Delta, Southwest See Rough Skies In '08

  • Bloomberg, Wednesday, December 5, 2007 12 PM

United, the world's second-largest carrier, says capacity in its primary U.S. jet operations will decline 3% to 4% percent next year. Delta plans to pare the number of seats it offers by as much as 5%. Southwest, the largest low-fare carrier, has reduced its 2008 capacity growth for a third time, to 4% to 5%, and Continental says it would slow growth in its main jet operations to 2% to 3% from 3% to 4%.

The climb in fuel prices and potential for a drop in demand threaten the financial recovery of U.S. carriers, most of which posted profits in 2006 after five straight years of losses.

U.S. carriers have boosted ticket prices seven times since Sept. 1 to combat rising jet fuel prices. The latest attempt by five of the largest airlines was rolled back yesterday, after Southwest decided against an increase.

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