United Airlines, suffering escalating fuel costs on top of the effects of a triple-whammy bad year, has begun to cut back its flight schedule and has warned employes that some of them will be laid off.
In a letter to employes posted over the weekend, Richard J. Ferris, chairman and chief executive officer, said United already has begun a plan to reduce the number of seats for sale by 4 percent in the next three months and will be required to institute "severe schedule reductions" for the 1980 schedule, which goes into effect about Jan. 8.
He also said furloughs of employes would be necessary although he said he didn't yet know how many of the airline's 54,500 employes would be affected until after the 1980 schedule is completed, about Nov. 1.
The Metropolitan Washington area will be affected by the flight cutbacks, first at Dulles International as United eliminates its nonstop flights to San Diego and Salt Lake City and then at National, where United plans to reduce its daily flights from the 31 it will be operating as of Oct. 28 by about one-fourth over the next three months.
Ferris said the company had recovered from the effects of last winter's bad weather and fuel cutbacks, the two-month strike by the machinists' union, and the 37-day grounding of the DC10S, which account for 22 percent of United's capacity. But the rapidly rising fuel costs, which have led to higher fares already and are expected to boots fares further, are coupled with the "recession we're in, and it's a sure thing fewer people are going to fly," Ferris said.
"Therefore, we can't put as many seats out for sale or we'll just lose more money," he said. About 80 percent of the airline's total expenses are related directly to the level of the flight schedule, he noted.
Besides the schedule cutbacks, United has moved to raise some fares and reduce the number and level of discounts. United has asked the Civil Aeronautics Board for permission to combine its Freedom Fare and Super Saver Fare into a single discount level, effective Nov. 15, where the level of the discount will vary depending on the length of the trip, rather than on the day of the week flown or the length of the stay. The longer the flight, the greater the discount. The new fares would require a seven-day advance purchased and seven-day minimum stay, eliminating the discounts that used to be available for those who stayed over a Saturday night.
United also proposed raising first-class fares and reducing the regular fare discount for children from one-third to one-fourth of the adult fare.
United has been using provisions of the Airline Deregulation Act to end services at a number of cities the large carrier said it could no longer serve profitable with its jets including Charleston, W. Va., Merced, Visalia and Stockton, Calif., Asheville, N.C. It just added Salem, Ore. to the list.
United hasn't really used the liberal entry provisions to add new routes, except one to Orlando, Fla. It does plan to add significant numbers of flights into Florida this winter, however, including 15 round trips from Chicago and three round trips from Denver, in addition to expanding its existing services to Florida.