News

American Airlines will slash US services by 12%, cut thousands of jobs and charge passengers $15 to check in a bag following a round of cost-cuts announced on Wednesday.

The airline, the world's largest, will reduce capacity worldwide by 4% this year and bring in a range of other passenger charges ranging from $5-$50. The announcement came as oil prices rose above $133 a barrel.

American chief executive Gerard Arpey said: "The airline industry was not built to withstand oil prices at $125 a barrel."

He called on other carriers to follow suit and said: "Our industry simply cannot afford to sit by hoping for industry and market conditions to improve."

All the major US carriers have cut services against the background of a developing US recession, but American's are the biggest to date. American is the only major US international carrier not to have gone through bankruptcy protection since 2001.

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