Continental plans
to reduce capacity

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By Kristen Hays
Associated Press

HOUSTON >> Continental Airlines announced today that it is cutting capacity, grounding airplanes and charging for certain services to low-fare customers in order to combat an industry downturn that persists nearly a year after the Sept. 11 attacks.

The Houston-based airline, the nation's fifth largest, said that by August 2003 it will provide 17 percent fewer seats compared to August 2001 levels. It also will ground 11 airplanes in its fleet to save $350 million on an annual basis and $80 million for the rest of 2002.

No information was available on whether Hawaii operations would be affected.

Capacity will be reduced by 4 percent over the next year, spokesman Rashaan Johnson said.

The move comes after Continental's larger rivals have cut jobs, capacity or both in response to fewer people flying than before Sept. 11.

US Airways and Vanguard Airlines have filed for bankruptcy since the attacks siphoned passengers from the airline business.

American Airlines, the nation's No. 1 carrier, announced last week that it would cut 7,000 jobs and reduce capacity 9 percent by November. No. 2 carrier United and Northwest Airlines have said they will cut capacity 9 percent and 13 percent, respectively, for winter.

Continental announced no layoffs.