Continental Airlines Inc said it will pull more planes from service, add fees to some low-fare tickets and make about 100 other changes to save more than US$350 million a year. Customers can expect to encounter more rules and a US$20 charge for paper tickets.
Continental's plan follows AMR Corp's announcement that it is cutting 7,000 jobs at American Airlines and reducing capacity 9 percent by November to save US$1.1 billion a year at the world's largest carrier. US Airways Group Inc recently filed for Chapter 11 bankruptcy protection and United Airlines parent UAL Corp has warned it may do the same if it can't lower costs.
"We need to do some aggressive belt-tightening so we don't end up like them," Continental Chief Executive Officer Gordon Bethune said in a statement. "Unless market conditions improve quickly, we'll be forced to make further changes."
Airlines are trying to slash costs and boost revenue to stem losses that totaled a record US$7.3 billion last year and more than US$3.8 billion in this year's first half. Corporate travel, a major source of airline revenue, has been cut in the recession and vacation travelers who have filled planes since the Sept. 11 terrorist attacks refuse to pay higher fares.
Yesterday's actions, which include taking 11 Boeing Co MD-80 aircraft out of service by the end of next year, still likely won't be enough to return Houston-based Continental to profit, Chief Financial Officer Jeff Misner said. The company is forecast to lose US$0.39 a share this quarter and US$1.12 next quarter, the average estimates of analysts polled by Thomson First Call.
The cost reductions would equal about US$3.20 a share after taxes, with about US$80 million, or US$0.72, being recognized this year, said Michael Linenberg, a Merrill Lynch analyst.
The shares of the fifth-largest US carrier rose US$0.73, or 8.7 percent, to US$9.10 at 4:15pm in New York Stock Exchange composite trading. The news pushed up rivals' shares.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS