1. Archive

Airline cutbacks could hurt travel

High jet fuel costs are accelerating the cutbacks and asset sales that are reshaping the nation's airlines, and the industry that emerges may disappoint many travelers. "We probably will see some constriction of the air service available to the public unless we see fuel prices fall," Robert J. Aaronson, president of the Air Transport Association of America, said Wednesday.

Sustained jet-fuel prices at $1.25 per gallon could force airlines to cut service in smaller markets; restrict connecting flights, forcing many business people to stay out of town overnight; and reduce or eliminate discount fares.

In one of the biggest developments so far, struggling Pan Am Corp. agreed Tuesday to sell most of its prized London routes and other assets to a healthier competitor, UAL Corp., for $400-million.

"The rising fuel cost is a catalyst," said Kevin Murphy, an analyst with Morgan Stanley. "There's a whole series of asset transfers taking place from the weak carriers to the strong carriers."

Up next:Correction