US Airways Group Inc. is considering cutting the number of available seats and adding fees as record fuel prices boost costs this year by about $2 billion, executives of the carrier said.
The airline's board started a two-day meeting Wednesday to study options, and “everything is on the table,” President Scott Kirby said Wednesday in an interview at US Airways headquarters in Tempe, Ariz.
US Airways, which has its biggest hub in Charlotte, has taken the lead in adopting “a la carte” pricing in which passengers pay extra for services they select, such as checking a second bag or getting an aisle or window seat.
It has announced plans to reduce seating capacity as much as 4 percent.
“This is a very severe time for the industry,” Chief Executive Officer Doug Parker told shareholders at the airline's annual meeting.
US Airways' cost for fuel averages $300 a round- trip ticket, and the airline needs to charge about $700 for each ticket just to break even, he said. “This is not just a US Airways problem, this is an industry problem.”
US Airways is restricted in the amount of capacity it can cut by its union contracts, which specify a minimum number of aircraft flown and a minimum number of hours flown daily.
“It's far worse than after 9-11,” Kirby said of the impact of a 98 percent surge in jet-fuel prices during the past year. “You are going to see higher fares across the industry one way or another. You can't sustain the level of losses the industry is going to produce at current capacity and these prices.”