FORT WORTH, TEXAS - American Airlines will lay off thousands of employees, slash flights, park up to 85 airplanes and begin charging new fees, including $15 for a checked bag, as it struggles to cope with crushing fuel prices.

Based in Fort Worth, the company said the dramatic moves were needed to remain viable.

The fee for the first checked bag marks the first time that a major airline will charge for a service that has always been included in the airfare.

The spike in oil prices, which topped $133 per barrel this week, is a "fundamental game changer" for the airline industry, Gerard Arpey, American's chief executive, said during the annual shareholders meeting of AMR Corp., American's parent company.

"This industry cannot continue under its current structure," he said. "It's not built to withstand oil prices at $125 a barrel, and certainly not when record fuel expenses are coupled with a weak U.S. economy."

The airline plans to cut the number of seats on domestic flights by about 11 percent this year, and facilities nationwide could be consolidated or closed. Airline executives would not rule out the closure of a maintenance base.

Those cuts will result in job losses at American and its American Eagle subsidiary. Airline officials would not specify how many jobs will be lost but said the cuts will be across the board, including management and supervisory positions. Arpey said the cuts will likely be in the thousands.

American said it plans to make the domestic flight reductions in the fourth quarter. It also plans to retire 75 to 85 mainline and regional aircraft, including small jets and turboprops that Eagle operates.

The company said it expects to retire 40 to 45 mainline aircraft from American's fleet.

Many of the airplanes that American plans to retire will be the older MD-80 aircraft, which were temporarily grounded last month because of missed wiring safety inspections. But it also will retire some Airbus A300s, and 35 to 40 regional jets and "a number of turbo-prop aircraft" from the Eagle fleet.

American has also increased fees for extras, including flying with pets and oversize baggage. The increases range from $5 to $50 per service. It said the $15 fee for the first checked bag was necessary "given the increasing costs of transporting checked baggage." The fee is effective for tickets purchased on or after June 15.

Follow the leader?

Travelers could see other carriers follow.

"We are actually seriously studying it," Robin Urbanski, a spokeswoman for United Airlines, the second-biggest U.S. carrier, told The Associated Press. The Chicago airline has not decided whether it would match the fee, she added.

Delta Air Lines, the third-largest, has no current plans for a fee but is considering all options, The Associated Press reported.

The new and higher fees announced this month will generate several hundred million dollars in incremental annual revenue, according to American Airlines.

"While we understand that these fees affect customers, we also believe that our pricing for the services we provide remains extremely competitive in the industry and continues to offer our customers ample choice and value," Arpey said. "The bottom line is that our revenues, which include ticket sales and fees, must keep pace with our increasing costs."