Continental Airlines to cut jobs; ground planes

Yesterday it was United Airlines, today it is Continental. The price of fuel is continuing to have a major negative effect on the airline industry.

Continental Airlines announced that they will cut 6.5 percent of their workforce, or about 3,500 jobs and retire 67 of their aging aircraft in order to combat the rising cost of jet fuel. The announcement comes on the heels of United Airlines news yesterday that they will also retire aging aircraft and shed jobs.

Via Yahoo news:

“The airline industry is in a crisis. Its business model doesn’t work with the current price of fuel and the existing level of capacity in the marketplace. We need to make changes in response,” Larry Kellner, Continental’s chief executive, and Jeff Smisek, its president, wrote in a letter to Continental employees released on Thursday.

The airline industry is definitely in a crisis. With carriers reducing flights, shedding jobs, and retiring aircraft, air cargo will continue to take a hit as space and options become increasingly limited. On a side note, get ready for another increase to the fuel surcharge for international air cargo shipments. Beginning next week many forwarders, in response to the airlines fuel increase, will raise the fuel surcharge to $1.15 per kilo.