The parent companies of American Airlines and United Airlines, AMR Corp. and UAL Corp., have reported wider fourth-quarter losses and said they will cut more jobs and flights because of increasingly difficult market conditions, Bloomberg reported.
AMR’s net loss was US$340 million for Q4 2008, while UAL recorded a US$1.3 billion net loss, due in a large part to making incorrect fuel-hedging bets, the report said.
United reportedly said it will cut 1,000 additional jobs and slash services by as much as 9.5% this year. Meanwhile American said it will reduce its capacity by 6.5%, one percentage point more than previously planned. The Texas-based carrier is also reported to have said that it is “nervous” about demand for February and March.
“It’s very hard to be optimistic about travel demand given what we know about the economy,” Dan Kasper, Managing Director of US-based economic consulting firm, LECG LLC, was reported saying. “Maybe expectations for the airlines were a little more optimistic than warranted.”
The airlines themselves remained slightly more optimistic however. American’s CEO, Garard Arpey was quoted saying that fleet replacement had helped “put us on a sounder footing