Also hitting multiyear lows were UAL Corp., parent of United Airlines, which sank $3.41, or 29.5%, to $8.15; and Continental Airlines, which lost $2.15, or 13%, to $14.20.
In a dramatic reversal, the U.S. airline industry may post a $7.2-billion loss this year compared with a profit of $6.6 billion last year, said Jamie Baker, airlines analyst for J.P. Morgan Chase & Co.
For The Record
Los Angeles Times Friday, May 23, 2008 Home Edition Main News Part A Page 2 National Desk 1 inches; 55 words Type of Material: Correction
Baggage fees: A story in Section A on Thursday reported that American Airlines will charge a fee for all checked baggage. The fees will not be applied to most international travelers. A photo accompanying the article showed a couple headed to Mumbai. Passengers flying the airline to India would not be charged the new fees.
For The Record
Los Angeles Times Saturday, May 24, 2008 Home Edition Main News Part A Page 2 National Desk 1 inches; 28 words Type of Material: Correction
Baggage fees: An article in Section A on Thursday about American Airlines' imposing a bag fee misspelled the last name of travel website publisher Joe Brancatelli as Brocatelle.
In such a climate the airlines appear to be in a "war of attrition," Baker said, adding that the carriers seemed to be engaging in "destructive behavior as they attempt to merely outlast one another."
At current fuel prices, Baker said, a major carrier filing for bankruptcy was a "question of when, not if, in our minds."
Several major airlines filed for bankruptcy protection after the Sept. 11 terrorist attacks temporarily grounded air travel. Most emerged from bankruptcy by early last year and posted the industry's first full year of profits in 2007.
In April, however, four smaller airlines, including Aloha Airlines and ATA Airlines, went out of business, citing high fuel prices, and the rest of the industry has been in survival mode ever since.
Major airlines have cut unprofitable routes, slashed payrolls and added fees in hopes of countering their rising fuel expenses. Some domestic flights now include up to $130 in fuel surcharges.
"We are working hard on a number of fronts to cover our skyrocketing fuel costs," American's Arpey said.
Among them are plans to cut the number of seats on domestic flights by up to 12% in the fourth quarter by retiring at least 75 older, fuel-guzzling aircraft. American had previously expected fourth-quarter capacity to fall 4.6% from the same period in 2007.
The airline said it had not yet decided where the cuts would be made. At LAX, American and its regional subsidiary, American Eagle, operate about 130 flights a day, about a fourth of which are flown by aircraft identified for retirement. Last year, American flew 8.8 million passengers at LAX, accounting for about 15% of passenger traffic at the airport.
Many of the airplanes American plans to retire are older MD-80 aircraft, which were temporarily grounded last month because of missed wiring safety inspections.
Reducing capacity will lead to job cuts at American and American Eagle, the carrier said, adding that it didn't know exactly how many people would face layoffs but that the number could be in the "thousands."
