Limeyflyer
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Breaking News on Continental
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It's official. Employee bulletin out this morning.
ForgedBlade
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June 5, 2008
Dear Co-worker:
We’ve always said that you deserve open, honest and direct communication. This letter and the attached employee bulletin and Q&A are part of that commitment.
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.
While there have been several successful fare increases, those increases haven’t been sufficient to cover the rising cost of fuel. As fares increase, fewer customers will fly. As fewer customers fly, we will need to reduce our capacity to match the reduced demand. As we reduce our capacity, we will need fewer employees to operate the airline. Although these changes will be painful, we must adapt to the reality of today’s market to successfully navigate these difficult times.
The attached employee bulletin and Q&A outline some of the steps we are taking to address this industry crisis. The situation for all airlines is serious, and the actions we are announcing today are necessary to secure our future. We regret the loss of jobs caused by this crisis, and we will do our best to minimize furloughs and involuntary terminations.
These actions will help Continental survive this crisis. You have our ongoing commitment to keep you informed as the industry evolves and adapts to these unprecedented challenges. It is important that we all keep our focus on working together during these difficult times.
Employee Bulletin No. 9
CONTINENTAL TO REDUCE CAPACITY, FLEET AND STAFFING
Sixty-seven mainline aircraft and 3,000 positions to be eliminated; Larry and Jeff decline their salaries for the remainder of the year
CO today is announcing significant reductions in flying and staffing that are necessary for the company to further adjust to today’s extremely high cost of fuel. These actions are among many steps CO is taking to respond to record-high fuel prices as the industry faces its worst crisis since 9/11.
The price of Gulf Coast jet fuel closed yesterday at $151.26 – about 75 percent higher than what it was a year ago. At that price and at our current capacity, our fuel expense this year would be $2.3 billion more than it was last year. That increase alone amounts to about $50,000 per employee.
These record fuel costs have fundamentally shifted the economics of our business. At these fuel prices, a large number of our flights are losing money, and CO needs to react to this changed marketplace.
Starting in September, at the conclusion of the peak summer season, CO will reduce its flights, with fourth quarter domestic mainline departures to be down 16 percent year-over-year. This will result in a reduction of domestic mainline capacity (available seat miles, or ASMs) by 11 percent in the fourth quarter, compared to the same period last year.
By the end of next week, CO will provide details on specific flights and destinations that are subject to reduction or elimination. For additional information on departures and capacity for 2008 and 2009, see Table A.
As a result of the capacity reductions, CO will need fewer co-workers worldwide to support the reduced flight schedule. About 3,000 positions, including management positions, will be eliminated through voluntary and involuntary separations, with the majority expected to be through voluntary programs.
The company will offer voluntary programs in an effort to reduce the number of co-workers who will be furloughed or involuntarily terminated due to the capacity cuts. Details of these programs will be available next week.
The reductions will take effect after the peak summer season, except for management and clerical reductions, which will begin sooner.
In recognition of the crisis and its effect on their co-workers, Larry and Jeff have declined their salaries for the remainder of the year and have declined any payment under the annual incentive program for 2008.
CO will reduce the size of its fleet by removing the least efficient aircraft from its network. To accomplish this, CO is accelerating the retirement of its Boeing 737-300 and 737-500 fleets. In the first six months of 2008, CO removed six older aircraft from service. CO will retire an additional 67 Boeing 737-300 and 737-500 aircraft, with 37 of these additional retirements occurring in 2008 and 30 in 2009. Given the need for prompt capacity reductions in today’s environment, 27 of the 67 aircraft will be removed in September. By the end of 2009, all 737-300 aircraft will be retired from CO’s fleet.
CO will continue to take delivery of new, fuel-efficient NextGen Boeing 737-800s and 737-900ERs. Overall fuel efficiency will improve measurably as CO takes delivery of 16 of these aircraft in the second half of 2008 and 18 in 2009 and accelerates the retirement of the older, less fuel-efficient aircraft as mentioned previously.
By the end of the second quarter of 2008, CO will operate 375 mainline aircraft. Taking into account both the accelerated retirements and scheduled deliveries, CO’s fleet count will shrink to 356 aircraft in September 2008 and 344 aircraft at the end of 2009.
There you have it "...fewer customers will fly...". I'm reminded of that every time I attempt to jump-seat and can't get on a flight...
Dear Co-worker:
We’ve always said that you deserve open, honest and direct communication. This letter and the attached employee bulletin and Q&A are part of that commitment.
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.
While there have been several successful fare increases, those increases haven’t been sufficient to cover the rising cost of fuel. As fares increase, fewer customers will fly. As fewer customers fly, we will need to reduce our capacity to match the reduced demand. As we reduce our capacity, we will need fewer employees to operate the airline. Although these changes will be painful, we must adapt to the reality of today’s market to successfully navigate these difficult times.
The attached employee bulletin and Q&A outline some of the steps we are taking to address this industry crisis. The situation for all airlines is serious, and the actions we are announcing today are necessary to secure our future. We regret the loss of jobs caused by this crisis, and we will do our best to minimize furloughs and involuntary terminations.
These actions will help Continental survive this crisis. You have our ongoing commitment to keep you informed as the industry evolves and adapts to these unprecedented challenges. It is important that we all keep our focus on working together during these difficult times.
Employee Bulletin No. 9
CONTINENTAL TO REDUCE CAPACITY, FLEET AND STAFFING
Sixty-seven mainline aircraft and 3,000 positions to be eliminated; Larry and Jeff decline their salaries for the remainder of the year
CO today is announcing significant reductions in flying and staffing that are necessary for the company to further adjust to today’s extremely high cost of fuel. These actions are among many steps CO is taking to respond to record-high fuel prices as the industry faces its worst crisis since 9/11.
The price of Gulf Coast jet fuel closed yesterday at $151.26 – about 75 percent higher than what it was a year ago. At that price and at our current capacity, our fuel expense this year would be $2.3 billion more than it was last year. That increase alone amounts to about $50,000 per employee.
These record fuel costs have fundamentally shifted the economics of our business. At these fuel prices, a large number of our flights are losing money, and CO needs to react to this changed marketplace.
Network Changes
By the end of next week, CO will provide details on specific flights and destinations that are subject to reduction or elimination. For additional information on departures and capacity for 2008 and 2009, see Table A.
Co-worker Impact
The company will offer voluntary programs in an effort to reduce the number of co-workers who will be furloughed or involuntarily terminated due to the capacity cuts. Details of these programs will be available next week.
The reductions will take effect after the peak summer season, except for management and clerical reductions, which will begin sooner.
In recognition of the crisis and its effect on their co-workers, Larry and Jeff have declined their salaries for the remainder of the year and have declined any payment under the annual incentive program for 2008.
Fleet Changes
CO will continue to take delivery of new, fuel-efficient NextGen Boeing 737-800s and 737-900ERs. Overall fuel efficiency will improve measurably as CO takes delivery of 16 of these aircraft in the second half of 2008 and 18 in 2009 and accelerates the retirement of the older, less fuel-efficient aircraft as mentioned previously.
By the end of the second quarter of 2008, CO will operate 375 mainline aircraft. Taking into account both the accelerated retirements and scheduled deliveries, CO’s fleet count will shrink to 356 aircraft in September 2008 and 344 aircraft at the end of 2009.
There you have it "...fewer customers will fly...". I'm reminded of that every time I attempt to jump-seat and can't get on a flight...
ACL65PILOT
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willNOTfly4free
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From Yahoo! News
Continental Airlines cuts jobs, retires planes
NEW YORK (Reuters) - Continental Airlines Inc (CAL.N) said on Thursday it would cut 3,000 jobs, or about 6.5 percent of its work force, and retire 67 older planes as it scales down in the face of soaring fuel prices.
The No. 4 carrier is the latest of the major U.S. airlines to announce large cutbacks as they grapple with unprecedented oil prices. On Tuesday, UAL Corp's (UAUA.O) United Airlines announced plans to slash jobs and flights, following a similar move by AMR Corp's (AMR.N) American Airlines last month.
Continental said it would cut 3,000 of its 45,000 staff, and retire 67 single-aisle Boeing (BA.N) 737 planes by the end of 2009, on top of the six planes it has already pulled out of service this year.
The airline said it would replace some of those older jets with deliveries of new, more fuel-efficient 737s. Its mainline fleet of about 375 planes would shrink to about 344 by the end of next year, an overall cut of about 8 percent.
It said it would cut flights after the summer season, reducing domestic capacity -- or the number of seats for sale on U.S. flights -- by about 11 percent in the fourth quarter.
Continental Airlines cuts jobs, retires planes
NEW YORK (Reuters) - Continental Airlines Inc (CAL.N) said on Thursday it would cut 3,000 jobs, or about 6.5 percent of its work force, and retire 67 older planes as it scales down in the face of soaring fuel prices.
The No. 4 carrier is the latest of the major U.S. airlines to announce large cutbacks as they grapple with unprecedented oil prices. On Tuesday, UAL Corp's (UAUA.O) United Airlines announced plans to slash jobs and flights, following a similar move by AMR Corp's (AMR.N) American Airlines last month.
Continental said it would cut 3,000 of its 45,000 staff, and retire 67 single-aisle Boeing (BA.N) 737 planes by the end of 2009, on top of the six planes it has already pulled out of service this year.
The airline said it would replace some of those older jets with deliveries of new, more fuel-efficient 737s. Its mainline fleet of about 375 planes would shrink to about 344 by the end of next year, an overall cut of about 8 percent.
It said it would cut flights after the summer season, reducing domestic capacity -- or the number of seats for sale on U.S. flights -- by about 11 percent in the fourth quarter.
While this entire situation sucks, I am very impressed to see these guys (Larry and Jeff) sharing in the pain. I somehow don't think we'll see this repeated many times in this industry.
Heard our resident age 65 leader yesterday in EWR saying how they have McCain on board with changing language in a new Bill for over age 60 's guys to come back with previous seniority.
Just reporting what I heard the guy say.
Furloughs coming down the line and all he can think of is pushing more out the bottom with previous retired pilots. What a piece of work!
ACL65PILOT
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California
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Kugelblitz
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ACWild
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Based on this, I'm guessing 8 percent of the pilots. Since I'm not sure what the total number of pilots currently are, I don't know what number this equates to.
YourPilotFriend
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31 narrow-body planes = about 350 pilots.
Kugelblitz
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That would work out to about 400 pilots, my guess was around 3-500 pilots. I don't wish to play games with numbers like that, I was furloughed by AA 5 years ago and it is a devastating feeling. Very best wishes to my colleagues who are affected. Let's hope it isn't for very long...
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johnsonrod
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It would be a phased approach. So, not all 400 at once. Difficult time in the industry for us all...
Kugelblitz
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This is when the utter nihilism that age 65 represented ushers to the fore. What a pathetic, cruel, short sighted lot we are.
Bob Dylan
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On the contrary, some of "us" hit the lottery in this industry just a few short months ago with the ability to add to the pot for another 5 years.
Great move John Prater. And to think, a majority voted AGAINST Age 65.
hockeypilot44
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atlcrashpad
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I think CAL feels they have two big liabilities they regret not dealing with in a BK: The A plan and the scope clause. The frozen A plan can't be touched (except in a BK) and the scope clause has to be bargained. The CAL pilot group has to stick together to protect both these. However, with furloughs in light of age 65, I think we can see where the imminent retirees might stand on scope!
I don't know how we proceed? They are parking all the planes they would want replaced by RJs. The senior guy battlecry "it's going to happen anyway!" might be heard again as they try to sell out our scope clause?
I don't know how we proceed? They are parking all the planes they would want replaced by RJs. The senior guy battlecry "it's going to happen anyway!" might be heard again as they try to sell out our scope clause?
They will. It's just: how much will they offer?
We will have a fair number of senior guys/gals simply bail anyway. (There are some senior types who've had enough and have enough) There will be an equal number of ever needy types who are completely unreliable in times like these.
Call your reps. Tell them to sweeten the early out package.
The only problem is that 'buy-outs' cost money, and right now, to weather this downturn, "Cash is King."
Furloughs cost money, with severence pay, re-training, etc, but probably less than a buy-out. However, reducing the # at 'top of scale' pay will also reduce costs. I guess what I saying is that it is all 'bean counter' stuff and would have to be figured out by the numbers people.
That said, the whole 'age 65' thing sure came at the right time, Thanks Jack A$$ Prater. Don't work at CO, but maybe some of his former co-workers might have some things to say to him.
And, alpa sux anyway, thought a union was supposed to 'work for us' seems like they are working Against us, at least the 'majority' of the membership.
For what its worth. Good Luck to very one at CO, and all of us in the industry.
PD
SuperFLUF
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Don't focus on the 8% number.
CAL doesn't staff based on airframes. Its based on block hours. So the 8% may be a good w.a.g. but its the utilization of the remaining airframes that will drive the staffing.
Hopefully the utilization of the more fuel efficient NG's that will be replacing the OG's will be higher, thus helping to minimized any _urloughs.
Also, we have 367 aircraft on property as of June 1. That will increase to 375 by July 1 and then down to 356 in September. So we will be down 11 aircraft from today's #'s by Oct of this year.
CAL doesn't staff based on airframes. Its based on block hours. So the 8% may be a good w.a.g. but its the utilization of the remaining airframes that will drive the staffing.
Hopefully the utilization of the more fuel efficient NG's that will be replacing the OG's will be higher, thus helping to minimized any _urloughs.
Also, we have 367 aircraft on property as of June 1. That will increase to 375 by July 1 and then down to 356 in September. So we will be down 11 aircraft from today's #'s by Oct of this year.
Last edited:
Kharma Police
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