FACTBOX: Airlines scramble to survive as fuel costs soar

(Reuters) - American Airlines said on Wednesday it will cut thousands of jobs, retire old aircraft and charge passengers to check bags in a move to counter record fuel prices and a weak U.S. economy.

The world's largest airline, owned by AMR Corp, said it would reduce domestic capacity by 11 percent to 12 percent in the fourth quarter, its biggest service cutback since the September 11 attacks.

As all the major U.S. airline stocks slumped amid a brokerage downgrade for the sector and oil prices soared over a record-setting $133 a barrel, AMR shares lost 24 percent of their value on Wednesday.

American's decision is just the latest by the struggling airline industry to cut costs and generate more revenue at a time when skyrocketing fuel costs have made flying prohibitively expensive.

Some other tactics have included:

* Domestic capacity reduction has been high on the radar of most airlines over the last year and Southwest Airlines Co, American, Delta Air Lines Inc, Continental Airlines Inc have led the pack. Fewer daily flights and nonstop flights are some of the strategies adopted to deal with rising fuel prices.

* Some airlines, such as Southwest, have also decided to fly slower to save fuel.

* A few carriers -- including Eos Airlines, Frontier Airlines Holdings Inc, Skybus Airlines, ATA Airlines, Champion Air, Aloha Airlines, MAXjet Airways Inc -- have either declared bankruptcy or just shut down.

* Airlines such as JetBlue Airways Corp and Continental have also tried to retire old planes and replace them with a more fuel-efficient fleet. The installation of newer technology, such as winglets, has helped improve efficiency at Continental and Delta.