Houston Continental Airlines said Saturday it is cutting its flight schedule by 20 percent and furloughing 12,000 employees more than one fifth of its payroll because of an expected drop in air travel following the terrorist attacks.
"These actions are a direct result of the current and anticipated adverse effects on the demand for air travel caused by this week's terrorist attacks on the United States and the operational and financial costs of dramatically increased security requirements," the company said in a statement.
The nation's fifth largest carrier said it had seen a drastic drop in bookings since Tuesday's terrorist attacks. In addition, many corporations have instructed their employees to avoid U.S airlines, the airline said.
Prior to Tuesday, when the nation's air traffic system was shut down following the attacks that involved four hijacked jetliners, Continental and its subsidiaries flew 2,500 flights daily. The company has more than 56,000 employees.
"While we regret the necessity for this massive furlough and substantial schedule reduction ... we have no choice," said Gordon Bethune, Continental chairman and chief executive officer.
The terrorist attacks have dealt a severe economic blow to the airline industry that threatens to put some players out of business.
Analysts predict billions in losses because of a fear of flying, the shutdown in air travel over the past few days, and the delays and higher costs associated with the new airport security measures.
In its release Continental reiterated its call for the federal government to take steps to restore stability to the industry, which has already been weakened by the economic slowdown
Congressional leaders are considering a variety of ways to assist the airlines, including direct aid, loans and a bill that might limit their liabilities from crashes.