American Airlines cuts services

America's largest carrier, American Airlines, has announced deep service cuts, including a reduction in the number of flights from New York's LaGuardia airport and cancellation of services to four smaller US cities. The cuts become effective in October.

The announcements will see the end of services from various airports to Albany, N.Y., Providence, R.I., Harrisburg, Pa., and San Luis Obispo, Calif. American flies to those cities under its American Eagle brand, which uses smaller jets.

In Washington, American will cease flying to Reagan National Airport from LaGuardia in November.

The cuts are in line with an announcement last month that the airline would slash its domestic flying capacity by as much as 12 per cent, compared with a year ago.

American said the changes are being instituted to reduce costs and create a "more sustainable supply-and-demand balance" in light of high fuel costs.

US airlines will pay an estimated $61 billion for jet fuel this year, up $20 billion from a year ago and almost double from 2004.

Industry analysts say that US airlines are desperately looking for ways to raise money in order to cope with the fuel crisis. These options include selling assets, taking on additional debt and selling ownership stakes.