Continental cuts jobs after heavy Q2 loss

CONTINENTAL Airlines is to slash 1,700 jobs and raise luggage fees following its posting of a US$213 million loss for the second calendar quarter. This compares to a loss for the same period last year of only $5 million.

Revenue fell sharply by $3.13 billion (22.7 per cent) thanks in part to fears of swine flu in Mexico, which led to a loss of $50 million alone.

The job cuts will add up to 3.4 per cent of the carrier’s workforce and on top of the 500 cuts already announced.

The luggage fees are hoped to raise $100 million a year.

The news comes shortly after the US Department of Transportation (DOT) approved the Continental’s application to move from SkyTeam to Star Alliance.

“We are pleased to receive final approval from the [DOT],” said Larry Kellner, Continental’s chairman and chief executive officer. “Continental is working to provide a seamless transition for its customers from the SkyTeam alliance to Star Alliance this fall. The DOT decision greatly benefits our customers, employees and shareholders. It ensures global competition with other antitrust immunised alliances while encouraging the retention and growth of open skies between the US and other nations.”

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