Continental Airlines plans to cut 1,700 jobs and increase some fees after reporting a $213 million second-quarter loss on declines in demand and fares.
The deficit of $1.72 a share widened from a loss of $5 million, or 5 cents, a year earlier, the Houston-based airline said today. Sales fell 23 percent to $3.13 billion.
The job cuts reflect the pressure on the industry from the collapse of business travel during the recession and fare sales to fill planes. The reductions are on top of 1,200 job eliminations the carrier has announced since May.
Continental’s quarterly loss was its seventh in a row. “We must take aggressive steps to increase revenue and reduce costs,” said Chief Executive Officer Larry Kellner (50) who is stepping down and being succeeded on January 1st by President and chief operating officer Jeff Smisek.
The job reductions and fee changes will produce $100 million in annual benefits when fully implemented next year, Continental said.
The carrier will add $5 to checked-bag fees for customers who do not prepay online and increase by $5 the cost to make a telephone reservation.
Excluding $44 million in costs for severance, terminated contracts and a drop in value of Boeing 737 jets that are being retired, Continental’ loss was $1.36 a share.
Bloomberg