With oil prices hitting new records almost daily, the nation’s largest air carrier, American Airlines, announced drastic steps Wednesday to “remain viable,” including charging new fees for all checked baggage, slashing domestic flights and laying off thousands of workers.<\/p>\n
It was one of the most extreme moves yet by a U.S. airline, and came as the price of oil jumped Wednesday to $133.17 a barrel, up $4.19.<\/p>\n
Starting June 15 most American passengers must pay $15 for checking a single bag. That comes on top of the airline’s decision two weeks ago to charge $25 for a second bag.<\/p>\n
American, the largest carrier at Los Angeles International Airport, said it was compelled to take the actions in what it called an “extraordinary” environment.<\/p>\n
Other airlines are expected to take additional steps to fight the twin curses of rising oil prices and a weak economy, increasing prospects for higher fares and crowded planes as the busy summer travel season kicks into gear with the upcoming Memorial Day weekend.<\/p>\n
Already, domestic airfares for summer travel are up 20% compared with a year ago, according to Farecast.com, an online travel search service. American said rising oil prices had increased its expected annual fuel costs by nearly $3 billion since the start of the year.<\/p>\n