Monday, March 7, 2011

United Cuts 2011 Growth and Southwest Raises Fares

AP Photo/Stephan Savoia

Mar 7, 8:07 PM EST
By DAVID KOENIG and JOSHUA FREED
AP Airlines Writers

DALLAS (AP) -- United Continental Holdings Inc., the world's biggest airline company, scrapped its 2011 growth plans on Monday and said it will cut unprofitable routes because of rising fuel prices.

The airline also said it may remove less fuel-efficient planes from its fleet.

United said the amount of flying it does this year will remain about the same as last year. It had previously planned to grow as much as 2 percent.

Fuel has become into the largest single expense for most airlines. Flying less is one way they can offset it. Raising fares is another - and they've been doing that aggressively.

Over the weekend Southwest Airlines Co. joined a $10 increase started by other airlines on many domestic round-trip fares. Southwest's increase may have ensured success for a price hike by major airlines that seemed to be faltering. Southwest carries more U.S. passengers than any airline and wields great influence over prices.