Continental to cull planes and cut jobs

HOUSTON, June 5 (UPI) -- Major U.S. air carrier Continental Airlines said Thursday it would cull 67 aircraft from its fleet and cut 3,000 jobs.

"The airline industry is in a crisis," a letter to the company's 45,000 employees said.

In a report issued Thursday, researchers at Challenger, Gray and Christmas said the airline industry had collectively reduced its workforce by 21,710 in 2008, "as soaring fuel prices erode profit margins."

The letter to Continental employees said a succession of fare increases "haven't been sufficient to cover the rising cost of fuel."

"As fares increase, fewer customers will fly. As fewer customers fly, we will need to reduce our capacity to match the reduced demand," the letter said.

Continental also announced Chairman and Chief Executive Officer Larry Kellner and President Jeff Smisek were declining their salaries for the remainder of the year.

On Wednesday, United Airlines announced similar measures, saying it would eliminate its low-fare airline Ted, cull 100 older planes and cut its workforce by 1,100.

In job cuts, which number 5,500 a month from March to May, "the only reason we will not surpass the 2001 record is because the airlines never returned to pre-9/11 employment levels," the Challenger report said.