Air travel demand drops; Delta trims capacity for 2009

— -- November passenger revenue for Continental's mainline flying grew 2% to 3%, below the 4% to 6% increase the carrier had been expecting, and way below the double-digit increases in passenger revenue Continental recorded in the summer months.

Other airlines don't provide monthly revenue guidance, but Continental's new numbers show they are losing their ability to fill seats without resorting to broader and deeper fare cuts.

Continental's disclosure was followed Tuesday morning by Delta's capacity cut announcement. Officials at Delta — now the world's largest airline with its recent acquisition of Northwest Airlines — had not clearly stated 2009 plans. Delta President Ed Bastian told analysts and investors at a conference in New York that the carriers' new plan for 2009 calls for a 3% to 5% reduction in international flying, and an 8% to 10% cut in domestic flying.

Other carriers also are reacting to falling demand:

CEO Gary Kelly said Southwest's first-quarter capacity will be down 4% to 5%, which is slightly less than the 5% to 6% reduction Southwest officials previously had announced.

•Continental treasurer Gerry Laderman said his carrier will retire 30 Boeing 737s in 2009 and add only 19 new planes, 18 of them new 737s. He added that the airline is seeing "softness" in demand for first- and business-class seats.