Page last updated at 12:28 GMT, Thursday, 5 June 2008 13:28 UK

Fuel bill sees Continental cuts

A Continental jet
Several US carriers have announced drastic measures to save costs

Continental Airlines has become the latest carrier to scale back operations due to rising fuel bills, cutting 3,000 jobs and reducing capacity by 11%.

The firm's chief executive said the industry was in "crisis", adding that the board would not be taking bonuses.

Continental's fuel bill will be $2.3bn more this year than in 2007, it said, with ticket price rises not enough to offset the 75% hike in jet fuel.

Earlier, Qantas scrapped some services to south Asia to cut overheads.

The job cuts at Continental represent about 6.5% of the carrier's total staff.

It will announce next week which routes are going to be trimmed back or abandoned.

"These actions are among many steps Continental is taking to respond to record-high fuel prices as the industry faces its worst crisis since 9/11," the company said.

'Grim outlook'

The price of oil hit a record high of more than $135 a barrel last month, although it has since pulled back to trade about the $120-a-barrel mark.

Many airlines are starting to take drastic steps to cut overheads and increase revenue.

This week US carrier United Airlines said that it was grounding 100 of its planes and cutting between 900 and 1,100 jobs, in addition to 500 already announced lay-offs.

Delta Airlines is offering redundancy to all 3,000 volunteers who have come forward - despite initially only planning to lay off 2,000 workers.

American Airlines, meanwhile, is to become the first major US carrier to charge passengers to check in a first bag.

Several airlines, including Qantas, British Airways and Virgin Atlantic, have increased their fuel surcharges.

The International Air Transport Association (IATA) has warned that the airline industry faces a "grim" outlook, saying passenger numbers will be dented by soaring fuel costs and a global economic slowdown.


SEE ALSO
Qantas scales back Asia flights
05 Jun 08 |  Business
United Airlines cuts 100 planes
04 Jun 08 |  Business
Sky-high fuel hurts US airlines
23 Apr 08 |  Business
BA fuel surcharges rise further
29 May 08 |  Business
Fuel price grounds Qantas planes
28 May 08 |  Business

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