June 23, 2008 / 7:34 PM / 12 years ago

United Airlines to lay off 950 pilots

CHICAGO (Reuters) - UAL Corp, parent of United Airlines, said on Monday it plans to lay off 950 pilots as it prepares to cut domestic capacity to offset soaring fuel prices.

A passenger walks by the empty counter at the United Airlines Terminal at O'Hare International airport in Chicago June 4, 2008. REUTERS/Jeff Haynes

“As we reduce the size of our fleet and take actions companywide to enable United to compete in an environment of record fuel prices, we must take the difficult but necessary step to reduce the number of people we have to run our business,” the No. 2 U.S. carrier said in a statement.

The latest layoffs involve nearly 15 percent of United’s 6,518 pilots. The carrier has said it plans to cut its staff by 1,400 to 1,600 as it aims to reduce domestic capacity by 14 percent in the fourth quarter.

The airline industry has been battered by record high fuel costs, and major carriers are groping for stability through capacity cuts that enable them to run leaner operations and charge higher fares.

A spokesman for the Air Line Pilots Association, the union that represents United pilots, was not immediately available for comment.

“We continue discussions with ALPA and all of our unions on ways to mitigate involuntary furloughs, and we are working to notify all of our employee groups about furloughs as soon as we know the impact of our capacity reductions,” UAL said.

UAL, which has 55,221 employees, lost $537 million in the first quarter and has held merger talks with rivals to try to bolster its competitive position amid rising fuel costs. The carrier recently said, however, that it does not plan to merge with another airline but will enter into a global cooperation with Continental Airlines.

UAL’s downsizing is consistent with recent steps taken by AMR Corp’s American Airlines, which said last month it would cut its domestic capacity by 11 percent or 12 percent in the fourth quarter and eliminate more than 1,000 jobs.

In March, Delta Air Lines, which plans to merge with Northwest Airlines, said it would cut 2,000 jobs through voluntary retirement and reduce domestic capacity by 10 percent this year.

Shares of UAL fell $1.07, or 14.9 percent, to close at $6.09 on Nasdaq.

Reporting by Kyle Peterson, editing by Tim Dobbyn, Richard Chang

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