The problem of aircraft trajectory planning is formulated as a hybrid optimal control problem. The aircraft is modeled as a switched system, that is, a class of hybrid dynamical systems. The sequence of modes, the switching times, and the inputs for each mode are the control variables. An iterative bi-level optimization algorithm is employed to solve the optimal control problem. At the lower level, given a pre-defined sequence of flight modes, the optimal switching times and the input for each mode are determined. This is achieved by extending the continuous state to include the switching times and then solving a conventional optimal control problem for the extended state. At the higher level, the algorithm modifies the mode sequence in order to decrease the value of the cost function. We illustrate the utility of the problem formulation and the solution approach with two case studies in which short horizon aircraft trajectories are optimized in order to reduce fuel burn while avoiding hazardous weather.