Continental Cuts 3,000 Jobs as It Grounds Planes

Continental Airlines said Thursday that it would cut 3,000 jobs and retire 67 Boeing aircraft, becoming the latest airline to announce capacity reductions in the face of high prices for jet fuel.

Continental’s announcement came a day after United Airlines said it was discontinuing Ted, its low-fare airline, cutting 1,100 more jobs on top of previously announced cuts and retiring a total of 100 aircraft. Delta Air Lines and American Airlines have announced similar steps.

Continental’s move, which equals a 16 percent reduction in its capacity, had been rumored in industry circles on Wednesday. The details came in a message to employees from Continental’s chief executive Lawrence W. Kellner and its president, Jeffery A. Smisek.

The airline, based in Houston, said Mr. Kellner and Mr. Smisek would not accept their salaries for the rest of 2008. Continental’s shares were up more than 9 percent in mid-morning trading.

“The airline industry is in a crisis,” the two executives said in the message to employees. “Its business model doesn’t work with the current price of fuel and the existing level of capacity in the marketplace. We need to make changes in response.”

Source: NYTimes