United Airlines struggle with fuel costs and announce further job losses

US carrier United Airlines has announced further plans to reduce its workforce as it struggles with the soaring cost of fuel.

America’s second largest airline is to axe 7,000 staff and slash more than a sixth of domestic routes in a bid to cut costs, after record fuel costs pushed the company to a quarterly loss of $2.73 billion (£1.36 billion) compared with a profit of $274 million compared with the same period the year before.

Revenue for the quarter grew 3% to $5.37 billion. Fuel costs at the airline have increased 53% to $1.8 billion in the same quarter.

The job losses mean that United Airlines has announced plans to axe a total of 11,000 jobs in the last 12 months alone amid a slowing US economy and a surge in oil prices.

Last month, United announced it was to shed around 950 of its 6,600 pilots and it would ground 100 of its planes and cut 1,100 jobs, while in April, it announced it was to eliminate 500 jobs.

United also said it will drop 7% of all international routes including Denver to London and San Francisco to Nagoya, Japan.

Commenting on the results, Glenn Tilton, the group’s chairman and chief executive, said the industry is faced with the most challenging environment ever experienced. We must, therefore, take the necessary action to offset unprecedented fuel costs.

Today’s announcement follows more bad news in the airline industry. Just last week, Australia’s flagship carrier, Qantas Airways, confirmed it is slashing 1,500 jobs as it battles with rocketing fuel costs.

Budget airline, Ryanair, is to cut around 250 flights from London’s Stansted airport as it also battles with rising fuel costs and airport fees.

Ryanair’s chief executive, Michael O’Leary, recently warned that most of Europe’s airlines will go bust if oil prices remain high.

US carriers including ATA Airlines, Aloha Airgroup and Skybus Airlines all ceased trading in March, while EOS and Maxjet revealed they would cease flying in May.

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