US Airways to Ground 11 Planes, Cut More Routes

US Airways (search) will ground 11 mainline planes and eliminate additional service beginning in May in the latest thrust to cut costs and shed capacity on underperforming routes, the bankrupt carrier said Friday.

While the seventh-largest domestic carrier has negotiated swaps and new lease terms with creditors for aircraft, the decision to take nearly a dozen older model Boeing Co. (BA) 737s out of service is its first move to shrink primary operations since entering bankruptcy in September 2004.

The size of US Airways' active mainline fleet will now drop by nearly 5 percent from 282 to 271. The airline and its pilots reached a concession agreement last fall that removed a provision requring it to operate at least 279 planes.

The carrier has yet to decide which 737s to ground, but those needing big maintenance or expensive upgrades likely will be the first to go.

Big airlines continue to be squeezed by high fuel prices and weak revenues due to low fares and excess seat availability.

US Airways has been retooling its schedule and trying to use aircraft more efficiently to maximize revenues and conserve cash to exit bankruptcy by June 30. It plans to file a reorganization plan by March 15.

The aircraft reductions will result in a net loss of 14 flights when the carrier's latest effort to boost the flying time of all its planes is factored in.

But even with the new aircraft and route cuts, seat capacity at US Airways is expected to grow between 4 percent and 6 percent in May compared with the same period last year, the company said.

Time is running short for US Airways to position itself for the spring-summer travel season, traditionally the strongest period of the year.

Moreover, US Airways will face stiffer competition this spring from discount rivals, Southwest Airlines (LUV) and AirTran Airways from Pittsburgh and its hubs in Philadelphia and Charlotte.

In addition to the aircraft cuts, US Airways will eliminate service to San Salvador and Panama City, and cut one daily departure each between its biggest hub Charlotte and Atlanta, Raleigh Durham, Orlando and West Palm Beach.

US Airways will also operate one fewer daily departure between Philadelphia and Hartford, Buffalo, Norfolk, Seattle, Fort Lauderdale and Orlando. Three flights from Philadelphia to Tampa will also be discontinued.

"The revenue and fuel environment requires that we move quickly to retire some of our older aircraft and weakest flying that simply cannot be sustained," said Bruce Ashby, the airline's executive vice president of marketing and planning.

The airline said last year it was planning some of the service cuts announced on Friday, and expects minimal systemwide job losses from the move, depending on results of voluntary programs to boost attrition.