After trying various other ways to meet the high costs of the fuel, Continental yesterday announced significant reductions in flying and staffing that company deems necessary for further adjusting to today's extremely high cost of fuel.
"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," Chief Executive Larry Kellner said. "We need to make changes in response."
These record fuel costs have fundamentally shifted the economics of our business. At these fuel prices, a large number of our flights are losing money, and Continental needs to react to this changed marketplace, Kellner said.
Most of the changes will start in September, at the conclusion of the peak summer season. Continental will reduce its flights, with fourth quarter domestic mainline departures to be down 16 per cent year-over-year.
This will result in a reduction of domestic mainline capacity by 11 per cent in the fourth quarter, compared to the same period last year.
By the end of next week, Continental will provide details on specific flights and destinations that are subject to reduction or elimination.
Continental expects voluntary departures to account for a majority of job losses, but said there will be layoffs. Some management positions will also be affected.
