WORLD> America
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WORLD> America
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Continental Airlines to cut 3,000 jobs, capacity
(Agencies)
Updated: 2008-06-05 21:53 Continental becomes the latest airline to make sharp cutbacks. On Wednesday, UAL Corp.'s United Airlines, the nation's No. 2 carrier, announced it would cut up to 1,100 more jobs, ground 70 airplanes and drop its coach-only service, named Ted. Two weeks ago, AMR Corp.'s American Airlines, the nation's largest airline, said it would cut capacity 11 percent to 12 percent after the peak summer travel season and probably eliminate thousands of jobs, though it hasn't given a figure. Some analysts have called on US carriers to shrink about 20 percent to cut spending on fuel and labor. Industry executives say that would also drive up fares as passengers compete for fewer seats in the air. It could also mean the reduction or elimination of service to some smaller airports. Continental was in advanced talks to combine with United, which would have created the world's largest airline. But Continental walked away from the deal in April as oil prices soared and the industry's outlook slumped. Continental's fuel bill in the first quarter jumped 53 percent, or $364 million, and labor as the airline's biggest expense. That forced Continental to rethink its strategy. Last year, Continental grew by 4.1 percent, and its planes remained crowded. But in April, it announced it would cut capacity on its US network by 5 percent beginning in the fall because of concern over fuel prices and the weakening economy. |
