Continental said today (5 June) it is to cut 3,000 jobs, retire 67 aircraft and reduce domestic capacity by 11% as the airline”s bosses released an employee bulletin announcing ”the airline industry is in crisis.”
The carrier”s chairman and CEO Larry Kellner and its president Jeff Smisek said that fare increases have not been enough to withstand the rising cost of fuel, but they will mean fewer passengers will fly and therefore capacity reductions are needed.
”The actions we are announcing today are necessary to secure our future,” read their statement in the bulletin. ”Continental [is responding] to record-high fuel prices as the industry faces its worst crisis since 9/11.”
Details of where capacity cuts will take place ” to being in September ” will be announced next week. The 3,000 job losses will include some management, with the ”majority” expected to be through voluntary programmes.
Kellner and Smisek have declined their salaries for the rest of the year in recognition of the crisis and its effects on the workforce.
Qantas is taking the axe to international routes following last week”s domestic cuts ” Japan and South East Asia are the most affected markets, with withdrawals of the thrice-weekly Melbourne-Tokyo service from September, of [subsidiary] Jetstar”s Cairns-Osaka-Nagoya route from December and Sydney-Kuala Lumpur.
Frequency on Qantas” Sydney-Tokyo route will fall from nine to seven rotations a week from September, and its Sydney-Los Angeles will switch from 17 to 15 weekly services at the end of the year once the airline launches its Airbus A380 on the route.
"We have to look closely at each individual market, including the number of frequencies we operate and which of our flying businesses is better suited to serve those destinations,” said Qantas CEO Geoff Dixon. "The Japan-Far North Queensland market has also been particularly difficult for us for a number of years. At current fuel prices, the Group would lose more than $100m operating to Japan under our existing schedule.
"Using the larger A380s on a spread of our USA services will enable us to grow Melbourne-Los Angeles capacity and maintain our total current capacity levels from Australia to the USA."
Dixon said Qantas had done everything possible to mitigate the effects of the schedule changes.
"We will continue to look for opportunities as conditions improve to address capacity issues and reinstate services where and when we can."