Continental to cut service, eliminate 1,000 more jobs

April 07, 1994|By New York Times News Service

Continental Airlines said yesterday that it would eliminate an additional 1,000 jobs, further reduce its flights from its Denver hub and drop service to 10 more cities.

Industry analysts said the moves were another effort by the nation's fifth-largest carrier to reduce costs and keep aloft its fledgling no-frills, short-hop service.

The chief executive of Continental, Robert R. Ferguson III, disclosed the job cuts during meetings with employees that began yesterday.

At the same time, he also outlined a new compensation package, some of which took effect Friday, that would restore pay cuts, reinstate merit and longevity raises and give workers 4 percent of the carrier's stock.

The average employee's compensation will increase 13.5 percent during the next year, said Peggy Mahoney, a spokeswoman for the company.

The latest round of job cuts would include a reduction of 7 percent in the airline's management ranks and a reduction of 2 percent of non-man agers, the Houston Post reported yesterday.

Company officials declined to comment on where the job cuts would occur, except to say that they would be worldwide.

In August, four months after the carrier emerged from its second journey through Chapter 11 bankruptcy protection, Continental announced that it would lay off 6.5 percent of its 43,000 workers, or 2,500 full-time employees. It also said it would cut by 10 percent the number of its flights, but would expand its short-haul low-cost service, called Peanut Fares.

These discount flights, lasting 90 minutes or less, have proved popular with consumers. The carrier has

added staff in reservations and airports like Greensboro, N.C., where the daily flights have increased to 57, from 3 last October.

"To make it successful, they have to reduce infrastructure costs," said Glenn D. Engel, an analyst for Goldman, Sachs & Co. "Today's cuts are one of the steps to get there." He predicted that the carrier's capacity will decline by 3 percent this year.

Early in the summer, Continental will curtail its daily flights from Denver to 86 from 107, and pilots and flight attendants based there will be reassigned. The carrier has been shrinking its operations in Denver for more than a year, even as United Airlines has increased its market share there.

Also this summer, Continental will stop service from New Haven, Conn.; Islip and Elmira, N.Y.; Fort Collins, Colo.; Kalamazoo and Saginaw, Mich.; Scranton, Pa.; Billings, Mont.; Portland, Ore., and Reno, Nev.

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