Categorized | Airlines

Continental Airlines cuts 1,700 jobs…

Posted on 21 July 2009

Continental Airlines announced on Tuesday it would cut 1700 jobs and raise fees for checking luggage amid a slump in revenue and passenger numbers.


The Houston-based firm said it would be “eliminating approximately 1,700 positions across the company, including management and clerical positions.” They come on top of the previously announced removal of 500 reservation agents and leaves of absence for 700 flight attendants.


The cuts could save the firm 100 million dollars when “fully implemented in 2010.”


Continental aims to raise $100 million a year with higher fees. The carrier boosted by $5 the fees for checking bags on U.S. flights — to $20 for a first bag, $30 for a second for passengers who check bags at the airport instead of online. The change took effect immediately for flights on or after Aug. 19. The airline also added $5 to the fee for booking a reservation over the phone, and it said more revenue-raising measures were coming.


Chairman and CEO Lawrence Kellner said a key measurement of revenue as a ratio of capacity “appears to be bottoming out,” but added “it is doing so at low levels and we must take aggressive steps to increase revenue and reduce costs.”


Traffic measured in miles flown by paying passengers fell 6.4% compared with the second quarter of last year. Continental, including its regional affiliates, cut capacity even more sharply, by 7.8%, resulting in slightly fuller planes despite fewer passengers.


 “Second quarter results were adversely affected by significant declines in high yield traffic as many business travelers curtailed travel or purchased lower yield economy tickets due to the weakened economy,” the airline said.


In a statement chief executive Larry Kellner said the staff cuts were part of “aggressive steps to increase revenue and reduce costs.”

Source: AFP

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