US Airways to cut jobs and capacity, also charge for luggage and drinks

Following on the heels of United and Continental, US Airways has now stepped up and announced 1,700 job cuts and 6-8% capacity drop, but it will also look to charging passengers for luggage and drinks.

Aiming to “expedite the airline’s return to sustained profitability” the new plan will reduce domestic capacity by 6-8% by the end of the year, return 10 mainline aircraft by 2009 and dropping the leases of two A330s that were scheduled to be delivered in 2009.

“Our industry is profoundly challenged by the dramatic increase in fuel prices, and we must write a new playbook for running a profitable airline in this new and challenging environment,” said Doug Parker, US Airways Chairman and CEO.

“We are taking every action to operate a strong and competitive airline, while ensuring that our customers have continued access to competitively-priced air travel.”

On top of this, US Airways will also be implementing a US$15 luggage fee for the first bag checked.  This fee goes into effect for all tickets booked on or after the 9th of July, 2008 to all flights within the U.S., to/from Canada, Latin America, and the Caribbean.

US Airways also looks to introducing a new “in-flight beverage purchase program” come the 1st of August, 2008.  This will see economy passengers pay $US2 for a non-alcoholic drink on domestic services.  Currently economy passengers pay US$5 for an alcoholic drink, this will increase to US$7.

The Dividend Miles frequent flyer program will also be reviewed, the Arizona-based carrier has announced a new fee on processing of awards on or after the 6th of August, 2008.

“These new services and fees combined with US Airways’ previously announced Choice Seats and second-checked-bag carry programs could generate between US$300 million and US$400 million annually for the airline,” US Airways said in a statement.

This marks a closer step to the ‘pay for use’ model that has created a ‘new world carrier’ model in the aviation industry.