Published: Friday, June 6, 2008
Fuel costs force cuts for Continental Air
The airline joins other top carriers as it prepares to eliminate 3,000 jobs and reduce capacity by 11 percent.
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Associated Press
A Continental Airlines plane is on final approach as it passes the Capitol en route to Washington's Ronald Reagan National Airport in Arlington, Va. Continental Airlines announced Thursday it is cutting 3,000 jobs and reducing capacity in the fourth quarter by 11 percent, citing record fuel costs.
DALLAS -- Continental Airlines said Thursday it is cutting 3,000 jobs and reducing capacity by 11 percent, citing record fuel costs that have pushed the industry into its worst crisis since 2001. It also said its two top executives will forgo pay for the rest of the year.
The job cuts represent about 6.5 percent of the company's work force of 45,000.
Houston-based Continental said it will begin pulling back on flights in September, when departures on its mainline operations will drop about 16 percent below September 2007 levels. Fourth-quarter capacity will fall 11 percent.
Shares of Continental rose 68 cents, or 4.7 percent, to $15.18 in the opening minutes of trading.
The company also said Chairman and Chief Executive Lawrence Kellner and President Jeff Smisek will not take salaries or incentive pay for the rest of the year.
Continental becomes the latest airline to make major cuts as the carriers try to cope with record fuel prices, which have nearly doubled in the past year and pushed Continental to a loss of $80 million in the first quarter.
In a statement, the company said it plans to offer details on flight and destination reductions and eliminations by the end of next week.
The job cuts represent about 6.5 percent of the company's work force of 45,000.
Houston-based Continental said it will begin pulling back on flights in September, when departures on its mainline operations will drop about 16 percent below September 2007 levels. Fourth-quarter capacity will fall 11 percent.
Shares of Continental rose 68 cents, or 4.7 percent, to $15.18 in the opening minutes of trading.
The company also said Chairman and Chief Executive Lawrence Kellner and President Jeff Smisek will not take salaries or incentive pay for the rest of the year.
Continental becomes the latest airline to make major cuts as the carriers try to cope with record fuel prices, which have nearly doubled in the past year and pushed Continental to a loss of $80 million in the first quarter.
In a statement, the company said it plans to offer details on flight and destination reductions and eliminations by the end of next week.
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