Continental Airlines said today it would cut 3,000 jobs, or about 6.5 per cent of its work force, and retire 67 older planes as it scales down in the face of soaring fuel prices.
The fourth largest carrier is the latest of the major US airlines to announce large cutbacks as they grapple with unprecedented oil prices.
On Tuesday, UAL Corp's United Airlines announced plans to slash jobs and flights, following a similar move by AMR Corp's American Airlines last month.
"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.
We need to make changes in response," Larry Kellner, Continental's chief executive, and Jeff Smisek, its president, wrote in a letter to Continental employees released today.
Crude oil futures crested at $135 a barrel last month - more than twice the price of a year ago - sending the cost of jet fuel up sharply.
To counter its higher fuel bill, Continental said it would cut 3,000 of its 45,000 staff, and retire 67 older single-aisle Boeing 737 planes by the end of 2009, on top of the six planes it has already pulled out of service this year.
The airline said it would replace some of those jets with deliveries of new, more fuel-efficient 737s. Its mainline fleet of about 375 planes would shrink to about 344 by the end of next year, an overall cut of about 8 per cent.
It said it would cut flights after the summer season, reducing domestic capacity - or the number of seats for sale on US flights - by about 11 per cent in the fourth quarter.
Continental plans to cut domestic flights about 16 per cent in the fourth quarter, over the year before, but said it would not announce which destinations will be hit until late next week.