It also hopes to join one of the global alliances which are increasingly dominating international traffic, in the hope of shunting more international travellers onto its domestic network.

The plan follows the collapse for the second time of a planned $4.3bn merger with United Airlines after anti-trust officials at the Department of Justice threatened to block the deal.

The company said that many of its routes are carrying too many empty seats, a key factor in the $160m loss it expects to make in the third quarter.

Empty seats

"The need to restructure US Airways was obvious," the company's president and chief executive, Rakesh Gangwal, told an analysts' meeting.

"We are hauling a lot of empty seats... with no way to show any revenue for it, we've got to fix that problem."

US Airways is suffering from stiff competition for fewer travellers as the economic downturn bites.

During the analysts' meeting, Gangwal said the strategy could help it deal with increasing competition from smaller, cheaper rivals.

USAir now plans to buy 60 regional jets, with a capacity of 50-69 seats, to replace larger planes carrying 97 and 126 seats on many of its routes.

That should increase its operating profits by about $132m a year, the company said. Taking into account immediate infrastructure cost savings and plans to negotiate cheaper labour costs on some city-to-city routes, total savings could eventually be as much as $439m a year.

Membership in an international alliance could add $50m a year, it said.

Pilot anger

But the plans have already brought an angry response from the main pilots' union, with which US Airways will have to negotiate if it is to breach an agreed 70-plane ceiling on regional jets.

"If they are planning to replace mainline aircraft with small jets - in addition to replacing mainline flying - then management is on the path to decalring war on the US Airways pilot group," said a spokesman for the Air Line Pilots Association, which represents about 6,100 pilots.

Switched routes

The new aircraft are destined for routes including those between USAir's hubs in North Carolina, Pittsburgh and Philadelphia and the cities of New York, Boston and Washington DC.