Continental to Retire Planes, Cut Jobs

The airline industry is acting as one to reduce capacity by retiring older aircraft, hoping that it will have more control over pricing, as well as improving overall fuel efficiency.

On Wednesday, United Airlines, a unit of UAL(UAUA Quote), announced plans to reduce its fleet by 100 aircraft, taking out 17% to 18% of its mainline domestic capacity by 2009, and eliminate several thousand jobs.

Last month, American Airlines, a unit of AMR(AMR Quote), said it would lower mainline domestic capacity by 11% to 12% in the fourth quarter, retiring at least 75 mainline and regional aircraft. Overall capacity will decline by 7% to 7.5%, and thousands of employees will be let go.

Delta(DAL Quote), which is merging with Northwest(NWA Quote), has announced capacity cuts of about 10%, which will be accompanied by about 3,000 job losses.

Shares of Continental rose 4.8% to $15.20.