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. Last Updated: 07/27/2016

Airlines See Big Losses, Layoffs as Flights Cut

CHICAGO -- Continental Airlines Inc. said Saturday that it was laying off 12,000 staffers and warned it could file for bankruptcy as it and two other top five U.S. carriers slashed flight schedules in the fallout from the air attacks.

The industry's deepening crisis led Gordon Bethune, the chief executive of Houston, Texas-based Continental, to predict 100,000 airline job losses worldwide and prompted President George W. Bush's administration to announce it will hold urgent talks with carriers about their financial woes next week.

Without financial help from the government, Continental said a late-October reorganization of the company under protection from the bankruptcy court would be "prudent."

Northwest Airlines, the No. 4 U.S. carrier, and UAL Corp.'s United Airlines, the second-largest, said they would cut schedules by 20 percent, along with Continental, the fifth-largest airline.

Tuesday's air attacks, which left thousands entombed in the rubble of the World Trade Center's twin towers, shut down the nation's aviation industry for nearly three days and have prompted Americans to curtail travel plans sharply.

"The U.S. airline industry is in an unprecedented financial crisis," Bethune said in a statement. "Our industry needs immediate congressional action if the nation's air transportation system is to survive."

The layoffs announced by Continental, which represent 21 percent of its staff of more than 56,000 people, are likely to be followed by job cuts elsewhere. Minneapolis, Minnesota-based Northwest Airlines, which has 53,000 employees, said it would review its overall staffing needs by next week and bring in long-term scheduling cuts by Oct. 1.

Among other major U.S. airlines, the world's largest, AMR Corp.'s American Airlines, said it was reviewing staffing, and the third-largest, Delta Air Lines Inc., said it could not rule out layoffs.

The Geneva-based International Air Transport Association, which has 266 member airlines, has estimated that this week's immediate revenue losses and extra costs for the industry could total $10 billion.

White House spokesman Ari Fleischer said Saturday that Bush was "concerned" about the financial problems facing commercial carriers in the wake of Tuesday's attacks -- which used hijacked planes from American Airlines and United Airlines.

Several top-ranking members of the House of Representatives are pressing for passage of legislation authorizing $2.5 billion in grants and $12.5 billion in loan guarantees to aid all U.S. airlines that have sustained losses, not just the two that lost a total of four planes in the hijackings.

But so far the White House has balked at endorsing the aid package, which supporters say would help mitigate the industry's losses and send a signal to financial markets, reopening next week, that Congress will try to cushion the economic effects of the devastating assaults.

Continental's Bethune said the industry had lost an additional $1 billion on top of substantial, earlier 2001 losses as flights were grounded nationwide.

Continental itself is losing $30 million per day and could be forced to file for bankruptcy by late October if Congress does not quickly provide aid, warned Bethune.

"It's a sad day for us," he said.