Significant Capacity and Workforce Reductions at Continental Airlines

It is extremely turbulent times for airlines around the globe. Already American Airlines, United Airlines, Air New Zealand and Qantas have announced significant reductions to their international operations. Now, Continental Airlines (CO) has also confirmed details of its own reductions. These actions are in response to record-high fuel prices that are creating unprecedented challenges for the airline industry.

Starting in September, at the conclusion of the peak summer season, CO will reduce capacity from its hubs, resulting in an 11% decline of domestic mainline capacity (available seat miles, or ASMs) in the fourth quarter, compared to the same period last year. The changes will result in a 6.4% decline in consolidated (mainline plus regional) capacity in the fourth quarter, compared to the same period last year.

As of September 3, 2008, CO will be reducing frequencies in certain markets and will also discontinue service between its hubs shown below and the following cities or airports:

Houston George Bush Intercontinental: Cali, Colombia, Chattanooga, Tenn.,  Guayaquil, Ecuador, Hartford, Conn., Monclova, Mexico, Montgomery, Ala., Oakland, Calif., Palm Springs, Calif., Reno, Nevada, Sarasota, Fla., Tallahassee, Fla.,  and Washington – Dulles.

Newark Liberty: Albuquerque, N.M., Cologne, Germany, Santiago, Dominican Republic, Sarasota, Fla., Salt Lake City, Utah, San Jose, Calif., and Tucson, Ariz.

Cleveland Hopkins: Austin, Texas, Birmingham, Ala., Charleston, S.C., Charleston, W. Va.,  Cincinnati, Ohio, Des Moines, Iowa, Detroit, Mich., Green Bay, Wis., Greensboro, N.C., Lexington, Ky., Little Rock, Ark., Memphis, Tenn., Nashville, Tenn., Norfolk, Va.; Oklahoma City, Okla., Omaha, Neb., Ottawa, Canada, San Antonio, Texas, San Diego, Calif., Sarasota, Fla., Savannah, Ga., Toledo, Ohio, Tulsa, Okla., Washington-Dulles.

Guam A.B. Won Pat: Denpasar, Bali, Indonesia.

As a result of the discontinued service, the following stations will close:

Denpasar, Bali, Indonesia Oakland, Calif.
Cali, Colombia Palm Springs, Calif.
Chattanooga, Tenn. Reno, Nev.
Cologne, Germany Santiago, Dominican Republic
Green Bay, Wis. Sarasota, Fla. 
Guayaquil, Ecuador Tallahassee, Fla.
Monclova, Mexico Toledo, Ohio
Montgomery, Ala.

The following table shows the estimated capacity reductions by hub, including certain capacity changes effective prior to September 3:

The airline will also eliminate 3,000 positions across all work groups, including management positions, through voluntary and involuntary separations. The specific number of involuntary furloughs will not be determined until August, after the company knows how many co-workers elect to take advantage of voluntary programs.

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