The airline crisis deepened Saturday as two major carriers, Continental and Northwest, said they will slash their permanent flight schedules by 20% to survive. Continental also furloughed 12,000 employees, or 21% of its work force, and called on Congress for immediate help "to save our industry."
Continental, citing a "drastic drop" in passenger bookings and the historic shutdown of U.S. airspace in the aftermath of the terrorist attacks, also warned along with industry analysts that one or more airlines could seek bankruptcy protection as early as this week if they don't quickly get aid.
Industry observers said other airlines also will have to sharply reduce their schedules because of fewer passengers. Continental, the nation's fifth-largest airline, estimated that the industry has lost $1 billion since Tuesday's events and that industrywide furloughs and layoffs will total 100,000 as flights are reduced.
President Bush is concerned about the situation, White House spokesman Ari Fleischer said Saturday, though administration officials have not committed to backing any kind of bailout. Transportation Secretary Norman Mineta plans urgent meetings with airline executives this week to discuss the problems.
Analysts say US Airways is among the most susceptible to a bankruptcy filing. The carrier's routes are centered in the Northeast, it's already among the industry's weakest financially, and one of its big sources of income is Reagan National Airport in Washington, which remains closed. Airline officials could not immediately be reached for comment.
But many airlines are threatened with insolvency because they're running out of cash, executives and analysts said. While the industry has to keep paying more than $340 million in daily costs, their revenues have plummeted because the air traffic system not only was shut down but is only slowly and raggedly coming back to life. The airlines operated at only about 60% of their prior schedules Saturday.
"The patient is on the table clinging to life, and we need a transfusion and we need it now," Continental Chairman Gordon Bethune told a news conference Saturday.
The outspoken Bethune also warned that if airlines start going under, it will cause incalculable damage to the economy, affecting companies and workers involved in building aircraft and jetliner equipment and supplies as well as the travel agents, hotels, rental-car agencies and theme parks that depend so heavily on air traffic, to name just a few sectors.
