Airlines cut capacity

Airlines cut capacity Continental Airlines said Thursday it would cut 3,000 jobs and 67 of its fleet to adjust to soaring fuel prices.
   “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,” said Larry Kellner, the company’s chief executive officer.
   “The price of Gulf Coast jet fuel closed Wednesday at $151.26 — about 75 percent higher than what it was a year ago. At that price and at our current capacity, our fuel expense this year would be $2.3 billion more than it was last year. That increase alone amounts to about $50,000 per employee,” he said. “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.”
   He said starting 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 percent year over year. This will result in a reduction of domestic mainline capacity (available seat miles, or ASMs) by 11 percent in the fourth quarter, compared to the same period last year.
   Wednesday, United Airlines said it was cutting up 1,100 more jobs, and removing 70 airplanes from its fleet. Previously it had said it was cutting 500 jobs.
   American Airlines announced last month that it would cut workers and slash its domestic flight capacity by 11 percent to 12 percent in the fourth quarter, after the peak summer season.