(Ucs News) Citing ever-increasing jet fuel prices, the world’s largest carrier will begin eliminating passenger’s from Domestic and International flights. American, along with other major carriers are feeling the pinch of higher fuel prices. This is causing airlines to experiment with new business models. Gerard Arpey, chairman and CEO of American parent company AMR Corp., in a statement Wednesday said “We have seen the success of Fed-Ex and UPS have had not flying customers, American Airlines can do the same.”
United Airlines started a passenger the reduction trend this spring, and competitors quickly matched. Aviation consultant Bob Mann expects history to repeat itself as airlines struggle to stay aloft while paying historically high fuel prices.
“I think you will see others match,” Mann said. “No doubt if this continues you will see airlines dropping passengers from air travel.”
Houston-based Continental Airlines would not comment Wednesday on whether it would match, saying it could not discuss future plans. But United said it was seriously studying the possibility.
Major U.S. airlines face liquidation if capacity cuts and fare increases fail to cover rising fuel costs, the chief of an industry trade group said.
Oil at $130 a barrel “is simply a number around which we cannot survive,” James May, president of the Air Transport Association, told reporters Wednesday in Washington. “It will inevitably lead to failures in the business.”