Thursday, June 12, 2008

Continental tightens its belt

High oil prices and a sluggish economy continue to take their toll on the commercial aviation industry, and the hometown airline is not immune: Continental is shaving 3,000 employees from its workforce and cutting 6.4 percent of its total capacity (measured in available seat miles) across the board, and completely eliminating service to fifteen cities worldwide. Continental's Air Micronesia subsidiary, based in Guam, will feel the biggest cut with a 21.5% capacity decrease. The airline's belt-tightening will be felt here in Houston, too, as it reduces capacity to its Houston hub by almost 8 percent. Several destinations will be dropped as well:
Continental also says in a press release that it "will be reducing frequencies in certain markets and will also discontinue service" on a number of routes from its hubs. Below are the routes being dropped by Continental.

From Houston Intercontinental: Cali; Chattanooga; Guayaquil; Hartford, Conn.; Monclova; Montgomery; Oakland; Palm Springs; Reno; Sarasota; Tallahassee and Washington Dulles.

I've actually flown on two of these routes (Houston to Reno and Houston to Guayaquil) in the past. I'm kind of surprised that these routes didn't survive the axe; Reno/Tahoe is a busy leisure destination, and Houston has considerable economic ties to the Ecuadorean port city of Guayaquil (indeed, the two are Sister Cities).

The cuts, which were announced last week, will take effect on September 3rd. Unfortunately, I doubt that this will be the last round of cuts that take place. The commercial aviation industry (which, contrary to popular belief, is a net money loser) is on very shaky ground right now, and as long as oil prices stay high and the economy struggles, there really is no light at the end of the tunn-, er, runway.

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