Jazz, Air Canada's discount airline spinoff, has pulled all the lifejackets out from under the seats to save about a pound per passenger and a bit of fuel. The regulations say that is OK if the plane stays within 50 miles of land, and they have adjusted a few routes accordingly. Instead of a lifejacket, passengers will grab a seat cushion.
Now my reaction may be emotional; while there have been a few cases where life jackets have saved lives in a crash, there aren't many. (See wikipedia here). In 2002 the Economist claimed that "No large airliner has ever made an emergency landing on water...So the life jackets ... have little purpose other than to make passengers feel better."
However I suspect that if a plane did ditch in cold water that my chances of survival would be a lot better with lifejacket that held my head up then they would be clinging onto a cushion.
Save fuel by cutting back on peanuts and newspapers, but safety equipment? Another good reason to take the train. ::The Star
More ways that airlines are saving fuel
Airlines Cut Flights and Planes to Save Fuel
Airlines Save Gas By Slowing Down, Just Like Drivers