I put this up as an example that the whole economy is shifting to adapt to the new level of energy prices. For the last couple of days it has been United Airlines in the news, but the steep decline in air travel at these prices is an industry problem that can only be solved by downsizing.

http://news.yahoo.com/s/ap/20080605/ap_on_bi_ge/continental_airlines
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By DAVID KOENIG, AP Business Writer 16 minutes ago

DALLAS - Continental Airlines said Thursday it is cutting 3,000 jobs and reducing capacity by 11 percent, citing record fuel costs that have pushed the industry into its worst crisis since 2001. It also said its two top executives will forgo pay for the rest of the year.

The job cuts represent about 6.5 percent of the company's work force of 45,000.

Houston-based Continental said it will begin pulling back on flights in September, when departures on its mainline operations will drop about 16 percent below September 2007 levels. Fourth-quarter capacity will fall 11 percent.

Shares of Continental rose 68 cents, or 4.7 percent, to $15.18 in the opening minutes of trading.

The company also said Chairman and Chief Executive Lawrence Kellner and President Jeff Smisek will not take salaries or incentive pay for the rest of the year.

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