HOUSTON — The anguish plaguing the airline industry continues to come fast and furious with two major airlines recently announcing they would not only have to eliminate jobs but cut back on flights as they reel from the endless surge in fuel costs.

On June 5, Continental Airlines said recent fare increases were not enough to overcome the continued hike in oil prices and as a result, about 3,000 jobs would be eliminated through voluntary and involuntary separations. The reductions will take effect after the peak summer season, except for management and clerical reductions, which will begin sooner, the airline said. Continental Airline Chairman/CEO Larry Kellner and President Jeff Smisek said they will not take salaries for the rest of the year and have also declined any payment under the annual incentive program for 2008.

To put it in perspective, Continental said the price of Gulf Coast jet fuel closed on June 4 at $151.26–about 75% higher than what it was a year ago. At that price and at the carrier's current capacity, fuel expense this year would be $2.3 billion more than it was last year. That increase alone amounts to about $50,000 per employee, according to Continental.