Continental Airlines said Thursday that it would cut 3,000 jobs and retire 67 Boeing aircraft from its fleet, becoming the latest airline to announce capacity reductions in the face of high prices for jet fuel.

Continental's announcement came a day after United Airlines said it was discontinuing Ted, its low-fare airline, cutting 1,100 more jobs on top of previously announced cuts and retiring a total of 100 aircraft. Delta Air Lines and American Airlines have announced similar steps.

Continental's move, which equals a 16 percent reduction in its capacity, had been rumored in industry circles on Wednesday. The details came in a message to employees from Continental's chief executive Lawrence Kellner and its president, Jeffrey Smisek.

The airline, based in Houston, said Kellner and Smisek would not accept their salaries for the remainder of 2008.

"The airline industry is in a crisis," the two executives said in the message to employees. "Its business model doesn't work with the current price of fuel and the existing level of capacity in the marketplace. We need to make changes in response."

Continental said that at current prices for jet fuel, it would pay $2.3 billion more than in 2007 — or about $50,000 per employee. It said "a large number" of its flights are losing money, and that fare increases have not been enough to cover the rising cost of fuel.

"As fares increase, fewer customers will fly," the executives said, meaning the airline needs to cut flights, eliminate planes and reduce jobs to match lower demand.

Continental said it would give details next week of the flights that are to be cut or eliminated. Because of the reduced flight schedule, it said it needed 3,000 fewer employees, and would offer programs to encourage workers to leave.

It said it expected a majority of the employees would leave voluntarily, although there would be some layoffs. Most of the departures will take place in the fall, although some management and clerical employees will leave sooner, the airline said.

Continental, which has already retired six Boeing 737 aircraft this year, said it would retire another 67 planes through 2009. It said 27 would be removed in September and the rest by the end of next year.

However, Continental said it would continue to take deliveries of new, more fuel-efficient Boeing 737 aircraft this year and next year. The net reduction in its fleet will be 31 planes by the end of 2009, when it will have 344 aircraft, the airline said.

Continental broke off merger discussions with United in late April, saying its board thought the deal would not be in Continental's best interests. The two airlines are discussing whether to form a code-sharing alliance similar to an arrangement Continental has with Delta and Northwest Airlines.

Agencies