Oil prices hike, general economic woes, and "difficult competitive atmosphere” has compelled AMR Corp. – the parent company of American Airlines to cut down the number of domestic flights, retire at least 75 planes and to charge passengers for checked luggage. That was what the company stated on Wednesday.

In a statement released yesterday, the airline holding company based in Fort Worth, Texas, AMR stated that it will also go for job cuts at American Airlines and American Eagle Airlines and it could result in facility closings or consolidation. The company calso stated that it will reduce fourth-quarter mainline domestic capacity -- available seat miles flown -- by 11 percent to 12 percent from last year. The company stated it expects regional affiliate capacity to decrease by 10 percent to 11 percent in the fourth quarter compared with last year.

The company asserted that to generate revenue, it will charge $15 for the first checked bag, effective for tickets bought on or after June 15, though it doesn't apply to certain of the airline's customer programs. It also stated it has increased its fees for other services, ranging from reservation service fees to pet and oversized bag fees. Those increases mostly range from $5 to $50 a service. According to the company, new and increased fees will generate several hundred million dollars in incremental annual revenue.