United to slash jobs, flights

— -- United Airlines said Wednesday that it will remove 100 airplanes, lay off up to 1,100 employees and slash 17% of its domestic capacity.

In a conference call Wednesday, Glenn Tilton, United's Chairman and CEO, said the actions were "necessary for us to successfully compete in an industry challenged by record high fuel prices and a softening economy."

The Chicago-based carrier plans to retire its entire fleet of Boeing 737-300s, 94 in all. With the reduction, it will cut its mainline domestic capacity in the fourth quarter of 2008 by 14% compared to a year ago. The carrier will cut capacity by 11% in 2009. In total, it will cut 17% in domestic mainline operations in 2008 and 2009.

Its low-cost carrier subsidiary "Ted" will also be scrapped, and its fleet of 56 Airbus A320s will be reintegrated into United's fleet. The carrier also plans to cut six Boeing 747-400s, resulting in about a 5% cut in international capacity.

The move to remove these planes will result in lowering its average fleet age by 1.3 years to 11.8 years, giving it "among the youngest fleets in the industry," according to John Tague, United's COO.

The job cuts will affect salaried, contract and management employees by the end of the year, and will include 900 to 1,100 more on top of 500 previously announced.

"We are focused on reducing costs and improving revenue, both through fare and fee increases and by developing new sources of income," Tilton said.

United stock was trading at $9.37 at midday, up 84 cents (9.9 percent) over its opening price.