The airline industry is “in crisis” because of increasing fuel costs.

In another industry effort to counteract rising fuel prices, Continental Airlines has announced that it is to cut 3,000 jobs and reduce its fleet by 67, while its CEO and President will decline their salaries for the rest of 2008.

The airline regrettably announced that the “airline industry is in crisis” and that it is facing “its worst crisis since 9/11”, attributing the situation to the current price of fuel – at $151.26 (£77) per barrel, it is 75% higher than in 2007 – and its effect on passenger numbers.

In an open letter to its employees, Continental explained the situation: “While there have been several successful fare increases, those increases haven’t been sufficient to cover the rising cost of fuel. As fares increase, fewer customers will fly. As fewer customers fly, we will need to reduce our capacity to match the reduced demand.

“As we reduce our capacity, we will need fewer employees to operate the airline. Although these changes will be painful, we must adapt to the reality of today’s market to successfully navigate these difficult times.”

The news follows United Airlines’ announcement of job and fleet reductions, and also Qantas’ change to its international services.

Silverjet, the British luxury long-haul business class airline, also recently withdrew all of its operations after experiencing severe funding issues.