Continental Airlines Inc
Continental Airlines Inc. announced today that it will cut 1,700 jobs and raise fees for checked luggage, as a result of significant second-quarter losses and falling air traffic, according to The Associated Press.
The airline announced today that it suffered a $213 million loss in the quarter ended June 30, which equaled a loss of $1.72 per share. In comparison, this time last year the company posted a $5 million loss, or roughly 5 cents per share.
Revenue declined sharply, by 22.7%, totaling $3.13 billion. This figure was close to the projected $3.14 billion predicted by analysts in a survey by Thomson Reuters.
Analysts also forecast a loss of $1.35 per share, excluding one-time charges.
The 1,700 layoffs announced by Continental will make up approximately 3.4% of the airline’s total workforce. These job losses are on top of already proposed plans to cut 500 reservation agent positions and put 700 flight attendants on leave.
In raising fees, Continental hopes to increase its revenue by $100 million per year. Part of this plan includes raising the fee for checked baggage by $5. This means that it will now cost $20 to check the first bag and $30 for a second for passengers who check their bags at the airport instead of online. These changes will be effective immediately for all flights on or after Aug. 19.
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