United Airlines to slash 1,300 jobs

(AP) United Airlines (UAL) will cut 1,300 jobs and reduce flying in Houston after it lost a fight to keep Southwest Airlines Co. (LUV) from adding international flights there.

United had warned of the job cuts if the city council voted to let Southwest add international flights at Houston's Hobby Airport. The council voted Wednesday for a plan under which Southwest will pay the $100 million cost of adding international gates and a customs facility at Hobby.

United is the world's biggest airline and Houston's Bush Intercontinental Airport is its biggest hub. United had argued that adding international flights at Hobby would hurt connecting traffic at Bush airport.

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United says it must cut Houston flying 10 percent starting this fall and won't need as many local workers. Southwest says its international flights from Houston won't start until 2015.

Houston Mayor Annise Parker, who brokered the deal with Southwest, questioned whether United's job cuts were related to the fight over international service.

"That competition is at least three years away, so for United to say there are going to be 1,300 people laid off next week or so, that's just not reasonable," Parker said. "There is no competition today, so any decisions that they make on personnel are based on other things."

Parent company United Continental Holdings Inc. was formed in 2010 when United acquired Continental, which had long been based in Houston and was a major player in the local business community. The combined airline is based in United's hometown of Chicago.

Asked if the city would have rejected Southwest's plan if United Continental had stayed in Houston, Parker said "the discussion might have been very different."