America's second-biggest airline is to shed 13 per cent of its workforce - 7,000 staff - and cut more than a sixth of its domestic routes in an attempt to cut costs as the price of fuel continues to surge.

The announcement brings the total planned job cuts at United Airlines to nearly 11,000 as it tries to lower its operating costs. The airline said that it would also cut 7 per cent of its international routes, including Denver-London and San Francisco-Nagoya.

United, which is owned by UAL, said that it had permanently grounded 100 aircraft and had re-mortgaged some of its fleet to raise cash.

Unveiling the airline's second-quarter results, Glenn Tilton, chairman and chief executive, said: “Our industry is challenged as never before by the unrelenting price of oil, and United is taking aggressive action to offset unprecedented fuel costs.”

In the three months to June 30, the airline made a $2.73 billion (£1.36 billion) loss, against a profit of $274 million for the same period the year before. Revenue rose 3 per cent to $5.37 billion. Its fuel costs rose 53per cent to $1.8 billion for the quarter.

Chris Tarry, an independent aviation consultant, told The Times: “There are only three issues for global airlines now: oil, cash and, for some, survival. I have never seen anything like this market, and I've been covering it for 30 years.” UAL shares rose 47 per cent to $7.36 as the oil price slipped further.

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