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US Airways Group Inc. said it will eliminate 1,700 jobs and return 10 leased jets to counter surging fuel bills, while Continental Airlines Inc. said its plan for cutbacks would include dropping service to 15 cities.

The workforce cuts at US Airways pushed the total of U.S. airline job losses announced since May 30 to 9,300. Jet-fuel prices have doubled in the past year, threatening the industry with losses that may reach a record $7.2 billion in 2008.

Airlines "have to be decisive and put everything on the table," said Kevin Mitchell, chairman of the Business Travel Coalition. Executives have "a fuller appreciation of the magnitude of the crisis they're facing," he said.

US Airways, the seventh-largest U.S. airline, will charge $2 for soda and other non-alcoholic drinks, and add a $15 fee for the first checked bag, matching similar moves by American Airlines and United Airlines.

Retiring jets and dropping flights will reduce US Airways' domestic seating capacity by as much as 8 percent by year's end, with another cut of as much as 9 percent in 2009, the Tempe, Arizona-based company said.

"We have too many seats in the marketplace and not enough demand for those seats to raise fares," US Airways Chief Executive Officer Doug Parker told employees in a memo. "That leaves us with two options: reduce seats and find new revenue streams."

Continental's pullback today fleshed out the plan it unveiled last week to park 67 jets and trim U.S. seating capacity. Service at Continental's hometown hub in Houston will fall by 7.9 percent, and by 13 percent at its Cleveland hub.

Continental, the fourth-largest U.S. airline by traffic, will stop flying to airports including Oakland; Bali, Indonesia; Cologne, Germany; and Reno, Nevada. Those cities represent about 5 percent of the 286 destinations it served a year earlier.

Cutting 1,700 employees at US Airways would be about 5 percent of the carrier's workforce, based on Bloomberg data. The airline had 357 planes as of March 31, according to a U.S. regulatory filing.

The retrenchment by US Airways follows plans by AMR Corp.'s American, UAL Corp.'s United, Delta Air Lines Inc. and Continental -- the four biggest U.S. carriers, respectively -- to reduce capacity by 10 percent or more after the summer travel season ends.

US Airways said it expects to generate as much as $400 million in new annual revenue from the baggage fees along with new, higher charges for using call centers and redeeming frequent-flier points.

Service cuts at US Airways include shutting most of the airline's late-night operations in Las Vegas, "except for limited night service to the East Coast," according to the company statement.

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