CONTINENTAL=0ATO REDUCE CAPACITY, FLEET AND STAFFING =0ASixty-seven=0Amainl= ine aircraft and 3,000 positions to be eliminated; Larry and Jeff decline t= heir=0Asalaries for the remainder of the year=0A =0A CO=0Atoday = is announcing significant reductions in flying and staffing that are=0Anece= ssary for the company to further adjust to today=92s extremely high=0Acost = of fuel. These actions are among many steps CO is taking to respond=0Ato r= ecord-high fuel prices as the industry faces its worst crisis since 9/11.= =0AThe price of Gulf Coast=0Ajet fuel closed yesterday at $151.26 =96 about= 75 percent higher than what=0Ait was a year ago. At that price and at our= current capacity, our fuel=0Aexpense this year would be $2.3 billion more = than it was last year. That=0Aincrease alone amounts to about $50,000 per = employee. =0AThese record fuel costs have fundamentally shifted the=0Aecono= mics of our business. At these fuel prices, a large number of our=0Aflight= s are losing money, and CO needs to react to this changed marketplace. =0AN= etwork Changes=0AStarting in September, at the conclusion of the peak=0Asum= mer season, CO will reduce its flights, with fourth quarter domestic=0Amain= line departures to be down 16 percent year-over-year. This will=0Aresult i= n a reduction of domestic mainline capacity (available seat miles, or=0AASM= s) by 11 percent in the fourth quarter, compared to the same period last=0A= year. =0ABy the end of next week, CO will provide details on=0Aspecific fli= ghts and destinations that are subject to reduction or=0Aelimination. For = additional information on departures and capacity for=0A2008 and 2009, see = Table A. =0ACo-worker Impact=0AAs a result of the capacity reductions, CO w= ill need=0Afewer co-workers worldwide to support the reduced flight schedul= e. About=0A3,000 positions, including management positions, will be elimin= ated through=0Avoluntary and involuntary separations, with the majority exp= ected to be through=0Avoluntary programs.=0AThe company will offer voluntar= y programs in an effort=0Ato reduce the number of co-workers who will be fu= rloughed or involuntarily=0Aterminated due to the capacity cuts. Details o= f these programs will be=0Aavailable next week. =0AThe reductions will take= effect after the peak summer=0Aseason, except for management and clerical = reductions, which will begin sooner. =0AIn recognition of the crisis and it= s effect on their=0Aco-workers, Larry and Jeff have declined their salaries= for the remainder of=0Athe year and have declined any payment under the an= nual incentive program for=0A2008.=0AFleet Changes=0ACO will reduce the siz= e of its fleet by removing the=0Aleast efficient aircraft from its network.= To accomplish this, CO is=0Aaccelerating the retirement of its Boeing 737= -300=0Aand 737-500 fleets. In the first six months=0Aof 2008, CO remo= ved six older aircraft from service. CO will retire an=0Aadditional 67 Boe= ing 737-300 and 737-500 aircraft, with 37 of these additional retirements= =0Aoccurring in 2008 and 30 in 2009. Given the need for prompt capacity=0A= reductions in today=92s environment, 27 of the 67 aircraft will be removed= =0Ain September. By the end of 2009, all 737-300 aircraft will be retired= =0Afrom CO=92s fleet.=0ACO will continue to take delivery of new,=0Afuel-ef= ficient NextGen Boeing 737-800s and 737-900ERs. Overall fuel=0Aefficiency = will improve measurably as CO takes delivery of 16 of these aircraft=0Ain t= he second half of 2008 and 18 in 2009 and accelerates the retirement of the= =0Aolder, less fuel-efficient aircraft as mentioned previously.=0ABy the en= d of the second quarter of 2008, CO will=0Aoperate 375 mainline aircraft. = Taking into account both the accelerated=0Aretirements and scheduled delive= ries, CO=92s fleet count will shrink to 356=0Aaircraft in September 2008 an= d 344 aircraft at the end of 2009 (see attached=0ATable B). <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". Within the body of the text, only write the following:"SIGNOFF AIRLINE".