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U.S. airlines have cut 22,000 jobs in '08: Challenger

An empty United Airlines customer service counter is seen at the United Terminal at O'Hare International airport in Chicago June 4, 2008. REUTERS/Jeff Haynes

NEW YORK (Reuters) - The U.S. airline industry has cut nearly 22,000 jobs so far in 2008 as it continues to struggle with record oil prices, according to a report by employment consultancy Challenger, Gray & Christmas Inc.

Continental Airlines Inc said on Thursday it would cut 3,000 jobs, or about 6.5 percent of its work force, and retire 67 older planes as it scales down in the face of soaring fuel prices.

The No. 4 carrier is the latest of the major U.S. airlines to announce large cutbacks as they grapple with unprecedented oil prices, which have doubled in the past year.

On Tuesday, UAL Corp’s United Airlines announced plans to slash jobs and flights, following a similar move by AMR Corp’s American Airlines last month.

From March through May, U.S. airlines announced an average of 5,500 job cuts a month; and if that average continued through December, job cuts in the industry would surpass 60,000 this year, said Challenger, Gray & Christmas.

If that happened, the consultancy said 2008 would be the industry’s second biggest year for employment loss since 2001, when job cuts totaled 99,969, mostly in the wake of the September 11 attacks.

“The only reason we will not surpass the 2001 record is because the airlines never returned to pre-9/11 employment levels,” said John Challenger, chief executive of Challenger, Gray & Christmas.

“Job cuts are likely to remain heavy, however, for the remainder of the year. There is no end in sight for high fuel prices and now that these costs are being passed along to flyers through higher ticket prices, we will probably see a drop off in the demand for air travel,” added Challenger.

At least seven small airlines have filed for bankruptcy protection or stopped operating in recent months.

Reporting by Mark McSherry, editing by Gerald E. McCormick