Continental Swings Ax, Cuts 3,000 Jobs

Airline Will Also Take Nearly 70 Planes Out Of Service Citing Rising Fuel Costs

(CBS/ AP)  Continental Airlines Inc. said Thursday it is cutting 3,000 jobs and reducing capacity in the fourth quarter by 11 percent, citing record fuel costs and an industry in "crisis."

Also, the company's chief executive and president say they will not take a salary for the rest of this year and will decline bonuses. The cuts represent about 6.5 percent of the company's total staff of 45,000.

The carrier said it will start pulling back on flights in September, when it expects mainline departures will be down about 16 percent year-over-year. This will result in a total capacity reduction of about 11 percent.

By the end of the second quarter, Continental will operate 375 mainline aircraft. Houston-based Continental plans to take 67 planes out of service through 2009.

Continental said it will provide details on specific flights subject to cuts by the end of next week.

The company said that several fare increases have not been enough to offset the rising cost of fuel. With the price of jet fuel at about 75 percent higher than it was a year ago, Continental estimates it will spend $2.3 billion more this year than last.

"These actions are among many steps Continental is taking to respond to record-high fuel prices as the industry faces its worst crisis since 9/11," the company said in a statement.

Continental becomes the latest airline to make sharp cutbacks. On Wednesday United Airlines set plans to take 70 more jets out of service and cut domestic capacity by 17 to 18 percent in 2008-09. That came two weeks after a similar move by AMR Corp.'s American Airlines, which said it would slash domestic capacity 11 to 12 percent after the peak summer travel season.

"We have to make dramatic changes and some of those changes are not going to be terribly popular with our customers," Jim May of the Air Transport Association told CBS News correspondent Nancy Cordes.

Flight reductions may manifest themselves in the elimination of service to secondary airports in major cities, where major carriers often have to compete with low cost airlines. Delta Airlines is pulling out of Islip, New York; Continental is leaving Chigago Midway; and American is withdrawing from Oakland, California.

And while the major airlines have raised fares 12 times this year, some industry analysts say steeper hikes are still to come.

"I would say 20 [or] 25 percent higher is not impossible," said Mo Garfinkle of GCW Consulting. "And probably likely."

[skyhawk761]

The CEO of Continental received a total compensation package of 7.3 million for 2007. Why didn''t they start there first? It just amazes me that the public is not outraged with the unGodly packages given to CEO''s to run a company into the ground but not be held responsable.

[underdogus]

grab your soup bowl, or join the army

[shanev137]

Oil and gas prices have gone up 150% in less than 18 months. At that rate it won''t take very much longer for speculators to bring our entire country to a complete standstill.

See you in the soup lines.

[naucoming4u]

Taxi!.... TAXI!!!

[naucoming4u]

To cut costs, the airlines have announced many job cuts and aircraft fleet reductions, but the cost cutting that is never announced... though widely practiced...

...are the cuts in maintenance quality!

(The "see no evil, hear no evil, speak no evil" politics of the FAA inspectors will not come to light until well after a few tragic "accidents" and hundreds of bodies scattered across the landscape).

[naucoming4u]

All the major methods of public transportation are cutting back!

The Amish would make a bundle if they started up horse-drawn buggy/carriage factories! Within the next 5 years, we will be taking out loans just to buy those things!

[joycalifor]

How sad to see all of the ugly partisanship. This is the very best country in the world. And historically we have used our gifts to solve our problems. The uncivil discourse which is demonstrated in these postings is heartbreaking. Since when was science subjugated to politics? Since when did we stop wanting what was best for one another and for our country in general? When did we decide that some of us should dictate how others of us should live? When did we stop demanding the truth in our discourse and simply want to win our point? What happened to the essential cleansing of corruption and renewal of the vital energy that is America through honest and constructive discussion and exploration of ideas? Don''t think for a minute that just because we are free that we always will be. History is littered with societies that decided their countries were neither worthy nor in need of defense. And always, waiting in the wings, there was some greedy tyrant very glad to rush in and take control. And you just try and get it back.

[Latrocinor]

Like there is a shortage? Your brain is mush, if you don''''t know better.

Posted by rudy654
.. ..
You are correct Rudy. We still sometimes have small lines at the pumps in my area the buying is so strong.

No shortage in my area.

[Latrocinor]

Ha, the republicans have had the white house for 8 years, why havent they drilled?

Posted by dchu76
.. .. ..
They tried. The people said no. I guess the people must want petroleum to go away.

So it''s going away. The people spoke and now they are getting their consequences.

So be it. I bought my bicycle.

[neobrian-2009]

I am REALLY a BIG MORON !!!!!
Posted by b48151 at 03:05 PM : Jun 05, 2008
YES,THIS IS Plain To See !

[haoli25]

The REAL tragedy of this story is with all of these airlines putting planes out of service, laying off employees, and fewer Americans flying, how will the TSA employees be able to steal enough to support their drug habits?

[rudy654-2009]

Posted by b48151 at 03:05 PM

Like there is a shortage? Your brain is mush, if you don''t know better.

[floydzeppl]

Posted by b48151 at 03:05 PM : Jun 05, 2008
-----------

Give it up. You RINOs blew your chance. You screwed up, now you''ll pay for it. Buh Bye loser....HAHAHAHAHA!!!!!

[dchu76]

Gas has risen over 1.70 per gallon since Democrats took congress....just think how high it will go if Obama wins...
--------------------------------------------------------------------------------Posted by b48151 at 03:03 PM : Jun 05, 2008

Under a republican president.

[dchu76]

Stupid remarks by Davidjones sums up the Democratic mentality....''''Even if we drilled for more oil here that we could not refine that oil''''....DUHHH Who is also opposed to new refineries....That''''s why the Democraps will be voted out in mass numbers in Nov.
------------------------------------------------------------------------------
Posted by b48151 at 01:25 PM : Jun 05, 2008

Ha, the republicans have had the white house for 8 years, why havent they drilled?

[pr_boxer]

Typical headline seen during a Republican Administration. Bet those 3000 are glad they voted for Bush!

[sistatee-2009]

Flying is such a pain in the _ss I''d rather take a cab from New York to LA.

[rudy654-2009]

Boosh''''s mid east oil buddies are stealing from us. His tax cuts should make up for it though.
Posted by stevex47 at 10:22 AM

Exactly right. If there was a gas shortage, we would all have to be waiting in huge lines for whatever gas there is, or we would have odd and even days again as per the last crises in the early 70s. However, there is plenty of gas and it is very insincere of the big oil to pretend that more drilling will change their policy of restricting supplies and manipulating the price. I hope those bastaards are happy with their destruction of the economy.

[oneopinion]

According to the Forbes site referenced earlier (Posted by ibsteve2u), Kellner''s take was $10.33 million, not $1.03 million. To put it in some perspecitve ... If you found yourself fortunate enough to be earning $100,000/year, you would still have to work more than 100 years to earn what he earned in just one year.

[mdmo1]

I think it the gas price wow