Getting From Point A to Point B

Things continue to get tough in the airline industry. Getting from pint A to pint B took another blow yesterday as United Airlines' no-frills carrier Ted, launched in Denver in 2003, will be permanently grounded next year as part of a sweeping downsizing effort by the nation's No. 2 airline. United said Wednesday that it will cut more than 1,100 jobs and 100 aircraft in an effort to counter soaring fuel prices. The carrier did not specify how many local jobs would be affected.
It's the latest in a series of cutbacks by U.S. airlines to slash costs in one of the toughest economic environments ever to hit the industry.

"While these are difficult decisions that will impact many of our employees, they nevertheless must be made if we are to assure United's long-term viability," chief operating officer John Tague said in a message to employees. United, the dominant carrier at Denver International Airport, said it hasn't yet determined the impact of the cutbacks on routes and flight schedules, but analysts said it undoubtedly will mean higher fares and less convenience for travelers.
"It will be very painful for United," said airline-industry analyst Henry Harteveldt of San Francisco-based Forrester Research. "They're going to have to let go of a lot of employees.
United is projecting that fuel costs will jump from $5 billion last year to $8 billion this year if crude-oil prices remain near $125 a barrel. Oil futures closed Wednesday at $122.30. The record high was $135.14 on May 22.

American Airlines, the nation's biggest carrier, said last month that it would cut domestic flights by up to 12 percent by retiring at least 75 older, fuel-guzzling aircraft. On Wednesday, Delta Air Lines, which previously had announced a 10 percent flight reduction, said it also was considering further cuts.

Denver-based Frontier Airlines has abandoned some routes and is attempting to restructure after filing for bankruptcy protection in April, largely because of high fuel costs.
"What we're seeing is the impact of $130-a-barrel oil on an air industry that is not designed to handle those costs," Harteveldt said. Ted's demise, beginning next spring, follows the failure of several other low-cost offshoots of major carriers.