9/11 caused Continental to lay off 20 percent of workforce

Continental Micronesia has reduced its workforce by nearly 20 percent or over 330 positions since the Sept. 11, 2001 terrorist attacks in the United States, as part of its cost-cutting measures.

Walter Dias, Continental Micronesia staff vice president for sales and marketing, said the reduction of positions result from a combination of staff reduction, attrition, and the elimination of unfilled positions.

“Most of the 330 positions were eliminated in October 2001, immediately after 9/11. These positions are still vacant; they are no longer in existence,” Dias said. The 9/11 attacks caused a major blow on the travel industry, with passenger traffic reaching record-low levels.

Another factor that led to Continental Micronesia’s workforce reduction is the 51-percent increase in fuel prices over the past year. The airline also cited increased taxes and security fees and the escalating operating costs at the A.B. Won Pat Guam International Airport, where the carrier operates its Pacific hub.

In a press statement, Continental Airlines, parent company of Continental Micronesia, announced that it has identified approximately $200 million of additional annual pre-tax cost savings in order to further reduce the gap between revenue and expenses.

According to the airline, these initiatives are the carrier’s latest attempt to reduce its losses, without asking for wage and benefit concessions from its employee workgroups. Coupled with the carrier’s previously announced revenue generation and cost savings initiatives, the total contribution of these efforts is expected to result in approximately $1.1 billion in pre-tax run-rate benefits.

System-wide for Continental, these cost savings include a reduction of approximately 425 positions.

“This has been a difficult day for us as we struggle to survive,” said Mark A. Erwin, president and CEO of Continental Micronesia. “We continue to work hard to identify areas where we can reduce costs without impacting customer service.”

Dias noted that while other airlines have closed lounges and taken food off their in-flight service, Continental continues to provide full service meals and offer the same number of clubrooms under its President Club program.

The airline has 27 private airport clubrooms, providing members a venue to take care of business, conduct a meeting, make phone calls, or just relax between flights. Members also have access to over 40 affiliated lounges worldwide.

Continental Micronesia added that while the company recently announced a recall of furloughed flight attendants to service the new Honolulu-Nagoya route, these positions are required only for the added service and are dependent on the success of the route.

“Even as we work to find additional revenue sources to offset the increasing operating costs for airlines,” Erwin said, “we have to continue to reduce other expenses wherever we can. It’s unfortunate that many of our co-workers and friends will be out of a job because of unjustifiable increases in our operating expenses.”

In addition to staff reductions, Continental Micronesia is continuing to negotiate savings from numerous suppliers, demonstrating that its best business partners are willing to continue to work with the company and support it in these difficult times. The company is also continuing to pursue other savings initiatives, including a variety of fuel savings, facilities cost reductions, reductions in distribution costs, and technology-enabled productivity enhancements.

A wholly-owned subsidiary of Continental Airlines, Continental Micronesia offers more than 290 departures each week between 22 cities throughout the Pacific Rim, the Micronesian islands and Hawaii with a fleet of 13 next-generation Boeing 737 narrowbody and 767 widebody aircraft. In addition, Continental Micronesia and its codeshare partner Cape Air operate commuter service between Guam and the Commonwealth of the Northern Mariana Islands.