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Continental slashes capacity and jobs!

Posted By: Otteralum

Continental slashes capacity and jobs! - 06/05/08 01:28 PM

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, CNNMoney.com staff writer
Last Updated: June 5, 2008: 11:38 AM EDT


NEW YORK (CNNMoney.com) -- 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

http://money.cnn.com/2008/06/05/news/companies/continental_cuts/index.htm?cnn=yes
Posted By: Belize-N-Us

Re: Continental slashes capacity and jobs! - 06/05/08 02:00 PM

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.
Posted By: Barbara K

Re: Continental slashes capacity and jobs! - 06/05/08 07:10 PM

better check my flights for July :-(
Posted By: travelqueen

Re: Continental slashes capacity and jobs! - 06/05/08 08:15 PM

A schedule of specific flights and destinations that will be reduced or eliminated is due to be published next week.
Posted By: carbunkletrumpet

Re: Continental slashes capacity and jobs! - 06/05/08 11:54 PM

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.
Posted By: darrin fisher

Re: Continental slashes capacity and jobs! - 06/06/08 12:38 AM

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.

fish
Posted By: bywarren

Re: Continental slashes capacity and jobs! - 06/06/08 03:22 PM

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.
Posted By: kathyw

Re: Continental slashes capacity and jobs! - 06/06/08 03:44 PM

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.
Posted By: Northern Canuck

Re: Continental slashes capacity and jobs! - 06/06/08 05:39 PM

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!).
Posted By: JZB

Re: Continental slashes capacity and jobs! - 06/06/08 05:45 PM

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?
Posted By: kathyw

Re: Continental slashes capacity and jobs! - 06/06/08 05:49 PM

Hi Joanne,
Have a trip reserved for June 18th. Want to go on a trip to Mexico again? We can forget the shopping and just eat and drink.(lol) I have 4 more days to make up my mind.
See ya soon
Posted By: Barbara K

Re: Continental slashes capacity and jobs! - 06/06/08 05:58 PM

The high airfares are killing the tourism to Belize (and elsewhere). I have 3 sets of clients booked for August, 1 for Nov and 1 for Dec. That's it. Slowest I have seen in my 15 yrs of Belize sales.
Posted By: Belize-N-Us

Re: Continental slashes capacity and jobs! - 06/06/08 08:19 PM

Well, this should suit the anti-growth / anti-development folks just fine.

I bet it doesn't sit well with the locals that depend on these visitors for their livelihood.
Posted By: Canam

Re: Continental slashes capacity and jobs! - 06/06/08 10:25 PM

Tourism is getting killed just about everywhere, and unfortunately Belize will be hit terribly hard in the coming months. Horrible US dollar and rising prices....I wish I had much more in savings!!
Posted By: Rykat

Re: Continental slashes capacity and jobs! - 06/07/08 05:35 AM

Bottom Line - OIL!
Posted By: travelqueen

Re: Continental slashes capacity and jobs! - 06/07/08 04:48 PM

Continental will close stations... but don't think it will effect any of you. Sad stuff.
Posted By: KathyA

Re: Continental slashes capacity and jobs! - 06/07/08 04:58 PM

The airlines will survive in some form or another. My heart goes out to the small hotelier or condominium owner who didn't build the oil crisis into the equation. Prices from Atlanta are outrageous.
Posted By: travelqueen

Re: Continental slashes capacity and jobs! - 06/07/08 05:03 PM

Originally Posted by KathyA
The airlines will survive in some form or another.

In the meantime, people will loose their jobs. Baggage handlers, airport agents, flight attendents who know how to do nothing else but the job they have always done. It is very sad for all airlines and the industry as a whole. Yes, also very sad about the rise in prices but that can be blamed on oil and the value of the US dollar.
Posted By: wade the gringo

Re: Continental slashes capacity and jobs! - 06/07/08 05:07 PM

Originally Posted by travelqueen
Originally Posted by KathyA
The airlines will survive in some form or another.

In the meantime, people will loose their jobs.


ME!!!!!!
Posted By: JZB

Re: Continental slashes capacity and jobs! - 06/07/08 05:11 PM

I think someone needs to invent a hybrid airplane.
Posted By: Katsc4

Re: Continental slashes capacity and jobs! - 06/08/08 03:05 AM

Sadly we have a large group traveling down next Spring and now that the booking dates for our trip have opened up, the rates have risen higher. Looking for creative ways to get there.
Posted By: Barbara K

Re: Continental slashes capacity and jobs! - 06/09/08 06:30 PM

Via Cancun? Try a consolidator like Solar Tours for group rates (usually not better then published rates but can be "held" for longer). Where are they coming from?
Posted By: deadserious

Re: Continental slashes capacity and jobs! - 06/09/08 10:54 PM

Originally Posted by JZB
I think someone needs to invent a hybrid airplane.


Hydrogen Fuel Cell Airplane Flies:
http://gadgets.boingboing.net/2008/04/03/boeing-boeing-flies.html

But this is what I really want:
http://en.wikipedia.org/wiki/Nuclear_aircraft
Posted By: Barbara K

Re: Continental slashes capacity and jobs! - 06/10/08 04:26 PM

If you are booked on Continental for an upcoming flight, I would suggest you check your schedule to see if you have had any changes. I had a nasty one that would have definitely missed connections. Just took me 30 minutes on the phone with the airline to straighten it out and get new flights. I was never notified about the skd change. Don't wait! Best to check soon before flights fill up and options disappear.
Posted By: Katsc4

Re: Continental slashes capacity and jobs! - 06/11/08 12:48 AM

OUCH!! I just checked flying into Cancun and then on to Belize. The ticket from Detroit to Cancun is $456. Then from Cancun to Belzie City is $800 and up!

Seems all the carriers want to take us back to Dallas or Miami before heading to Belize. UGH!

We have 3 couples coming from Detroit, 3 from D.C. and 2 from Jacksonville area. At this point I have checked flights to Dallas, Atlanta and Miami then on to Belize. I have checked using multiple carriers as well as the same one. So I will have to keep searching or just bite the bullet and pay $1600 for our 2 tickets.

Posted By: Anonymous

Re: Continental slashes capacity and jobs! - 06/11/08 12:56 AM

Or do what many others do, which is to bus down from Cancun. Don't treat it as part of your journey but as the initial part of your holiday. Can be quite fun, and saves a fortune.
Posted By: suecate

Re: Continental slashes capacity and jobs! - 06/11/08 01:20 PM

It's the fees and taxes that are terrible. The flights are listed as $398 go really excited and then the taxes and fees are added an additional $425.00. It amazes me that fees and taxes are higher.
Posted By: bywarren

Re: Continental slashes capacity and jobs! - 06/11/08 01:38 PM

And remember, the government taxes fuel based on a percent of the total price. I haven't heard any politicians offering to cap the tax. frown
Posted By: Northern Canuck

Re: Continental slashes capacity and jobs! - 06/11/08 01:50 PM

Suecate, our taxes are only $110.00 and we are paying to 3 countries, Canada, US and Belize (Toronto to Belize via Charlotte). I assume you are leaving from the US, I can't understand why your taxes are so high...
Posted By: bywarren

Re: Continental slashes capacity and jobs! - 06/11/08 02:03 PM

Example for my kids and grandkids coming in Dec. from Illinois.
Ticket: $1121.OO
Taxes: 116.55
Extra Bagage 50.00

Plus departure tax when leaving Belize.
Plus flight to AC.

Starting to make me re-think if it was worth the fun having those kids. wink
Posted By: deadserious

Re: Continental slashes capacity and jobs! - 06/11/08 04:54 PM

I often find taxes on flights to belize from the US have taxes in excess of the actual ticket price. We paid about $250 for the ticket on our last trip with $300+ in taxes.
Posted By: deadserious

Re: Continental slashes capacity and jobs! - 06/11/08 05:07 PM

In fact, a quick search on Orbitz shows:

[Linked Image]
Posted By: bywarren

Re: Continental slashes capacity and jobs! - 06/11/08 05:51 PM

Now figure this out. Leaving from mia more that from Las Vegas

Review your selections
Change Flight Flight: 1 Round-Trip TicketMon, Sep 15, 2008Miami International Airport (MIA) to Belize City Goldson International Airport (BZE) Depart: 01:20pm

Arrive: 01:20pm
Miami, FL (MIA) to
Belize City, Belize (BZE)
American Airlines
Flight 2173 (on Boeing 737-800)
Adult fare rules

Class of Service: Economy
Total Travel Time: 2 hrs

--------------------------------------------------------------------------------

Mon, Sep 29, 2008Belize City Goldson International Airport (BZE) to Miami International Airport (MIA) Depart: 11:35am

Arrive: 03:30pm
Belize City, Belize (BZE) to
Miami, FL (MIA)
American Airlines
Flight 2172 (on Boeing 737-800)
Adult fare rules

Class of Service: Economy
Total Travel Time: 1 hr 55 mins
Travel Protection
Protect Yourself and Your Trip
Select an option before you continue.

Yes! I want to purchase Flight Protection for only$35.95 per person.
(Available to U.S. residents only)
No, thanks. I do not wish to purchase Flight Protection for this trip.
The Travel Protection Plan includes:

Trip Cancellation: You may be eligible to receive a refund of your air ticket up to a maximum of $800 per person for covered reasons.
Trip interruption: You may be eligible to receive a refund of your air ticket up to a maximum of $800 per person for covered reasons.
Up to $250,000 of Flight Accident Protection
Please see the Description of Coverage for further information.


--------------------------------------------------------------------------------

2Review the price
(All prices are in US dollars.)

1 Adult: $409.00
Taxes & Fees: $360.05
Travel Protection-1 plan $35.95 ( $35.95 per person )

--------------------------------------------------------------------------------

Total: $805.00 *
Posted By: deadserious

Re: Continental slashes capacity and jobs! - 06/11/08 07:43 PM

I guess you'll just have to start flying out of Vegas.
Posted By: bywarren

Re: Continental slashes capacity and jobs! - 06/11/08 07:50 PM

Lets just hope the pilots are better at figuring out their job than the bean counters are at doing theirs. I might not be the sharpest knife in the drawer, but I would think it costs more to fly from Vegas to Miami and then to Belize than just from Miami to Belize.

And more seriously, maybe Barb or someone in the business could explain the tax thing. Why is the tax on the tickets from Illinois so little as compared to the tax from Vegas?
Posted By: wade the gringo

Re: Continental slashes capacity and jobs! - 06/11/08 08:09 PM

I am not an expert, I load bags (loose bags). Evey airport charges the airline different tax and fees that must be passed on. I know in Vegas the airline pays landing fee, gate fee, passenger fee, baggage fee, security fee and i think a new blanket and pillow fee. that is all i know...lol
Posted By: bywarren

Re: Continental slashes capacity and jobs! - 06/11/08 08:37 PM

I think I found the "culprit". The taxes from LAS to MIA are $60.87. From MIA to BZE $360.05. From MIA to Cancun $114.50

Looks like Belize has some greater control over the price to fly there. $245.55 more to land a plane in Belize than Cancun then factor in the difference in fuel costs in Mexico as opposed to Belize and Mexico comes out way ahead. Granted Belize does not have the flexibility to subsidize fuel as Mexico but they sure have control over what they charge in landing and airport fees.

Short: I think this is the kind of info you need when business interests talk with the GOB. I would hope the GOB factors in how much revenue is lost because that tourist did not come to Belize.
Getting a couple hundred dollers compared to what a couple thousand infused into the economy would generate.
Posted By: Ernie B

Re: Continental slashes capacity and jobs! - 06/11/08 08:55 PM

Tax's/fee's Austin-Belize RT $96.30 (Cont)
Posted By: bywarren

Re: Continental slashes capacity and jobs! - 06/11/08 09:00 PM

Good one Ernie - there goes my theory.

And, when I checked Houston-BZE the tax is $98.05

Now I am really confused - I mean specificaly about this.

And now I owe an appolgy to the GOB - which I never ever dreamed I would.
Posted By: bywarren

Re: Continental slashes capacity and jobs! - 06/11/08 09:15 PM

To further confuse it, taxes from Houston to Cancun $100
Posted By: Ernie B

Re: Continental slashes capacity and jobs! - 06/11/08 09:16 PM

Tax's/Fees Houston-Cancun $102. Go figger.
Posted By: klcman

Re: Continental slashes capacity and jobs! - 06/12/08 01:52 AM

Just for the halibut, I just priced a ticket PWM/EWR/IAH/BZE

Taxes only $106.60 all in. Continental's explanation of taxes/fees:

Taxes and FeesTravel within the United States and to certain Canada and Mexico locations from the United States

Quoted fare includes all Base Fare and Surcharges and 7.5% U.S Excise Tax.

Quoted fare does not include the following taxes, fees and charges that may apply to your travel itinerary:

Passenger Facility Charges (PFCs) of up to $18 per roundtrip.
September 11th Security Fees of up to $10 per roundtrip. One way travel may incur fees in excess of $5.
U.S. Segment Fees of $3.50 per flight segment. A flight segment consists of one takeoff and one landing.
For travel to/from Hawaii and Alaska a U.S. Excise Tax of $7.70 per departure.
Each arrival in the U.S. from Canada/Mexico is subject to U.S. inspection fees of up to $12.
Non-U.S. government ticket taxes, fees and airport charges may add up to $45 per ticket for travel to/from Canada and Mexico.
A $50 fee will be charged for paper tickets issued by Continental.
Travel Between the United States and Non United States Destinations and Between Non United States Destinations

Quoted fare includes all Base Fare and Surcharges and 7.5% U.S. Excise Tax, if applicable.

Quoted fare does not include the following taxes, fees and charges that may apply to your travel itinerary:

U.S. Excise Tax of $15.40 for each international arrival and departure in the U.S.
Passenger Facility Charges (PFCs) of up to $18.00 per roundtrip.
September 11th Security Fees of up to $10 per roundtrip. One way travel may incur fees in excess of $5.
Each arrival in the U.S. is subject to U.S. inspection fees of up to $17.50.
Non-U.S. government ticket taxes, fees and airport charges may add up to $160 per ticket.
A $50 fee will be charged for paper tickets issued by Continental.
Posted By: Ernie B

Re: Continental slashes capacity and jobs! - 06/12/08 01:56 AM

Did LA post this ,or Klc ?
Posted By: klcman

Re: Continental slashes capacity and jobs! - 06/12/08 01:57 AM

HUH??

Did E post that or NYG?
Posted By: Ernie B

Re: Continental slashes capacity and jobs! - 06/12/08 02:03 AM

Either, and, or both, Why ?
Posted By: klcman

Re: Continental slashes capacity and jobs! - 06/12/08 02:04 AM

Hah
Posted By: Leah-Ann

Re: Continental slashes capacity and jobs! - 06/12/08 02:20 AM

Too funny, k! whistle
Did someone find a way to make the nodamniceorwaters even stronger? eek
Posted By: NYgal

Re: Continental slashes capacity and jobs! - 06/12/08 03:13 AM

What? shaking head!

Iluvebelize - wink you have that right!

Now back to the topic smile
Posted By: JZB

Re: Continental slashes capacity and jobs! - 06/12/08 03:53 PM

Looking at the senarios, it seems the highest tax is paid when you are departing internationaly from Miami. So may be you need to compare the taxes going from Las Vegas-Dallas-Belize and Las Vegas-Miami-Belize on the same days and see if there is a difference. Just a thought.
Posted By: bywarren

Re: Continental slashes capacity and jobs! - 06/12/08 04:25 PM

Taxes show the same - $360.05 - either from DFW or MIA
Posted By: JZB

Re: Continental slashes capacity and jobs! - 06/12/08 04:46 PM

I think airline fares/taxes will always be a great mystery alongside bigfoot and stonehenge. smile
Posted By: Ernie B

Re: Continental slashes capacity and jobs! - 06/12/08 07:57 PM

bywarren, have you figgerd the tax's/fee's scene yet ? smile
Posted By: suecate

Re: Continental slashes capacity and jobs! - 06/12/08 07:59 PM

Originally Posted by suecate
It's the fees and taxes that are terrible. The flights are listed as $398 go really excited and then the taxes and fees are added an additional $425.00. It amazes me that fees and taxes are higher.


These prices and fees are from Boston not much difference when you fly through miami or Dallas.
Posted By: Barbara K

Re: Continental slashes capacity and jobs! - 06/12/08 10:15 PM

I can't explain the taxes at all...
Posted By: Northern Canuck

Re: Continental slashes capacity and jobs! - 06/17/08 04:56 PM

This is the tax breakdown flying from Canada on USAirways
Tax: Belize Conservation Tax $3.75
Tax: Canada GST $0.98
Fee: US Immigration $14.00
Fee: US Animal & Plant Health Inspection Svc. $10.00
September 11 Security Fee $5.00
Fee: US Passenger Facility Charge $6.00
Fee: Belize Airport Development Fee $15.00
Fee: Belize International Security Fee $2.50
Fee: Belize Passenger Service Fee $15.00
Fee: Canadian Airport Improvement $19.53
Canadian Air Travelers Security Charge $16.60
Posted By: Amanda Syme

Re: Continental slashes capacity and jobs! - 06/17/08 05:53 PM

So the Belize fee is 1.25 higher than the US fee. And is $0.86 lower than the Canadian fees.

Posted By: Northern Canuck

Re: Continental slashes capacity and jobs! - 06/18/08 12:11 AM

Today I checked out USAirways and for the same departure dates they want an extra $200.00+ per ticket from 2 weeks ago. No way each passenger should pay $200 return for the increase in jet fuel. The return ticket to Barbados on American is cheaper than to Belize... go figure...
Posted By: *I Do* Belize Weddings

Re: Continental slashes capacity and jobs! - 06/18/08 01:49 PM

An extra $200 per ticket I don't think is just for a fuel increase. Rates change on plenty of things and you have to figure there could be a decrease in people flying causing those who wish to fly facing higher prices at this time. It's just something you need to accept and really not that big of a deal if you really want to fly.
Posted By: kerry

Re: Continental slashes capacity and jobs! - 06/18/08 04:38 PM

i booked my flight back in feb....out of curiosity i checked the price of the same flights last week...$385.00 more than i paid!
glad i booked when i did
Posted By: Northern Canuck

Re: Continental slashes capacity and jobs! - 06/18/08 06:22 PM

I find that hard to justify. Don't they realize if they keep jacking up the price they will sell less tickets and go deeper in the hole?
Posted By: travelqueen

Re: Continental slashes capacity and jobs! - 06/18/08 07:29 PM

Hence the reason several of them are eliminating staff, routes, stations and fleet.
Posted By: JZB

Re: Continental slashes capacity and jobs! - 06/18/08 07:42 PM

I'm shopping for tickets to Toronto for the end of the summer and the prices I'm getting are $1000 to $1200! Thats about $500 more than usual! Outrageous!
Posted By: MissLena

Re: Continental slashes capacity and jobs! - 06/18/08 07:54 PM

Originally Posted by Northern Canuck
I find that hard to justify. Don't they realize if they keep jacking up the price they will sell less tickets and go deeper in the hole?


Not if they are already losing money on each ticket.
Posted By: spl

Re: Continental slashes capacity and jobs! - 06/19/08 03:21 AM

agree
Posted By: Northern Canuck

Re: Continental slashes capacity and jobs! - 06/19/08 02:23 PM

A return ticket yyz to bze end of summer (via MIA) on AA is $829 but a return ticket bze to yyz on AA is $1105. Same mileage, same plane, same staff, same jet fuel...
Posted By: Northern Canuck

Re: Continental slashes capacity and jobs! - 06/19/08 02:37 PM

A return ticket yyz to bgi (Bardados)same dates as above via MIA on AA is $932 and in reverse $1010 but Barbados is almost twice as far from MIA as Belize is.
MIA to BGI 1606 miles
MIA to BZE 877 miles
Posted By: JZB

Re: Continental slashes capacity and jobs! - 06/19/08 02:43 PM

It used to be cheaper when originating in belize. Its very confusing... crazy
Posted By: Barbara K

Re: Continental slashes capacity and jobs! - 06/19/08 07:37 PM

more volume to Barbados than Belize.
Posted By: Northern Canuck

Re: Continental slashes capacity and jobs! - 06/19/08 08:31 PM

But with more demand (volume) wouldn't that allow them to increase not decrease the fare? I think the same airlines service Barbados and Belize except Continental. If they were concerned with the cost of each plane load wouldn't they save money using bigger planes?
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