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Continental slashes capacity and jobs! #282868
06/05/08 07:28 AM
06/05/08 07:28 AM
Joined: May 2005
Posts: 3,955
Frigin Cold Columbus, Ohio
Otteralum Offline OP
Otteralum  Offline OP
Lovely -- the most reliable service from the states to Belize just got dicier:

Continental cuts 3,000 jobs, grounds planes
Nation's fourth-largest airline takes 67 airplanes out of service and slashes payroll in response to high fuel prices.

By David Goldman, staff writer
Last Updated: June 5, 2008: 11:38 AM EDT

NEW YORK ( -- The crisis facing the airline industry, propelled by out-of-control fuel costs, claimed another victim on Thursday.

Continental Airlines said it is eliminating about 3,000 jobs, or 6.7% of its staff, and grounding 67 mainline aircraft in an attempt to cut costs amid record oil and fuel prices.

The airline - the nation's fourth-largest by miles flown by paying passengers - said it was facing the worst industry conditions since the terrorist attacks of Sept. 11, 2001.

"The airline industry is in a crisis: Its business model doesn't work with the current price of fuel and the existing level of capacity in the marketplace," said Larry Kellner, Continental's chairman and chief executive officer, and President Jeff Smisek in a letter to employees. "We need to make changes in response."

In recognition of the company's crisis Smisek and Kellner said they would not be paid the remainder of their 2008 salaries and will refuse payment under the company's annual incentive program.

"The move to decline their salaries is symbolically important, but the company's image will still be weighed down by the impending layoffs," said DePaul University transportation expert Joe Schwieterman.

New airline economics
The company said the 3,000 job cuts will come starting in September, and it expects most will be made with voluntary severance packages. After 9/11, Continental (CAL, Fortune 500) cut 12,000 staff, then about 21% of staff, in reaction to the terrorist attack and the drop in demand for flights that followed.

"These record fuel costs have fundamentally shifted the economics of our businesses," the letter said. Continental estimates that the year-over-year rise in jet fuel amounts to about $50,000 per company employee.

Many airlines have hiked fuel surcharges to fares and added fees to once-free benefits, such as food and checked baggage. This latest move by Continental most likely means that passengers will need to pay even more to fly, according to Schwieterman.

"There's going to be enormous upward pressure on fares," he said. "Consumers are going to feel this in a big way."

Continental would not offer further comment beyond the press release.

Despite other cost cutting attempts, Continental said its increased fares will lead to fewer passengers, which will necessitate a reduction in its capacity. The airline said it will trim its domestic mainline departures by 16% starting in September by accelerating the retirement of much of its Boeing (BA, Fortune 500) 737 fleet. Customers should expect crowded planes as airlines reduce capacity.

"The bad news is that airplane load factors could be pushed to 90%, which greatly affects the perceived quality of service," said Schwieterman. "The good news is that if they can shrink by as much as 20%, the airlines will become financially stable."

Fuel fallout may not be over
The last time U.S. airlines were under this much pressure from fuel prices - in September 2005 - two of them, Delta Air Lines (DAL, Fortune 500) and Northwest Airlines (NWA, Fortune 500), filed for bankruptcy.

On Wednesday, No. 2 airline United (UAUA, Fortune 500) announced it was grounding 100 planes and cutting up to 1,600 jobs. But it may not be long before another airline makes a similar announcement. Some analysts believe that airlines will continue attempt to show Wall Street that they have a handle on the fuel crisis.

"The cuts have been bigger than we expected, and more are still to come," said Schwieterman. "Low cost carriers haven't yet played their hand." To top of page

I will have a Belikin -- put it on klcman's tab.
Re: Continental slashes capacity and jobs! [Re: Otteralum] #282872
06/05/08 08:00 AM
06/05/08 08:00 AM
Joined: Jan 2008
Posts: 770
Mississippi, USA
Belize-N-Us Offline
Belize-N-Us  Offline
The price for our tickets with Continental has doubled over the last 6 months.

We used to be able to book for $520 now it's over $900 each.

Future full time Belizeans
Tommy & Sonia Blackledge
Magee, MS 601-849-1918
Re: Continental slashes capacity and jobs! [Re: Belize-N-Us] #282967
06/05/08 01:10 PM
06/05/08 01:10 PM
Joined: May 2000
Posts: 3,281
Barbara K Offline
Barbara K  Offline
better check my flights for July :-(

Re: Continental slashes capacity and jobs! [Re: Barbara K] #282985
06/05/08 02:15 PM
06/05/08 02:15 PM
Joined: Jan 2005
Posts: 4,294
travelqueen Offline
travelqueen  Offline
A schedule of specific flights and destinations that will be reduced or eliminated is due to be published next week.

Re: Continental slashes capacity and jobs! [Re: travelqueen] #283067
06/05/08 05:54 PM
06/05/08 05:54 PM
Joined: Oct 2003
Posts: 803
Brooklyn, NY
carbunkletrumpet Offline
carbunkletrumpet  Offline
Now would be a perfect time for Taca to start flying out of New Orleans like they did in the early 90's. That sux about Continental just about everything else out of BZE has to have a evening layover to get home now.

But why eat my vegetables I already know that I am short!
Re: Continental slashes capacity and jobs! [Re: carbunkletrumpet] #283070
06/05/08 06:38 PM
06/05/08 06:38 PM
Joined: Mar 2007
Posts: 161
abita springs, LA
darrin fisher Offline
darrin fisher  Offline
holy crap! ive been waiting forever for that to happen.

are you from around the easy? why dont you call em and tell em so.


Re: Continental slashes capacity and jobs! [Re: darrin fisher] #283118
06/06/08 09:22 AM
06/06/08 09:22 AM
Joined: Mar 2001
Posts: 2,718
Illinois, Arkansas,South Dakot...
bywarren Offline
bywarren  Offline
I was just booking airfare for my daughter, son-in-law and 3 grandkids to come to Belize over Christmas holidays from Illinois. Just under $7000. I wonder what this will mean for tourism this year? Has to have an impact.

Re: Continental slashes capacity and jobs! [Re: bywarren] #283126
06/06/08 09:44 AM
06/06/08 09:44 AM
Joined: Oct 2000
Posts: 359
Salt Lake City, Utah
kathyw Offline
kathyw  Offline
Continental will now only let you check in one piece of luggage (50 lbs) with the price of your ticket. The second piece will cost additional $25.00. I thought for International flights they were still allowing 2 checked pieces, however they told me the flights to Central Americal will be the same as domestic flights charging extra for the second piece.

Re: Continental slashes capacity and jobs! [Re: kathyw] #283142
06/06/08 11:39 AM
06/06/08 11:39 AM
Joined: Mar 2008
Posts: 314
Ontario, Canada
Northern Canuck Offline
Northern Canuck  Offline
We just booked return tickets for January with USAirways from Toronto. They only fly 4 days a week to BZE but we only paid $664.00 taxes included through Charlotte (easier than Houston!).

Re: Continental slashes capacity and jobs! [Re: kathyw] #283143
06/06/08 11:45 AM
06/06/08 11:45 AM
Joined: Mar 2006
Posts: 1,822
South Ambergris Caye
JZB Offline
JZB  Offline
Hey Kathy! When are you coming?

I just flew American to Austin for $670! Most expensive ticket I have ever purchased (to Austin) but at least they let me check in two bags without a charge. I wonder how long that will last?

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