Continental to Cut Its Routes, 2,500 Jobs as Loss Reported : Airlines: The carrier, newly emerged from Bankruptcy Court protection, also plans to eliminate service to Australia and New Zealand.

A few months after emerging from Bankruptcy Court, Continental Airlines on Monday said it will cut 2,500 jobs, reduce domestic flights and eliminate service to Australia and New Zealand.

The nation’s fifth-largest airline announced the cutbacks in conjunction with its first financial report since emerging from Chapter 11 Bankruptcy Court protection April 28. The Houston-based airline reported a larger than expected loss--$24.4 million--for the period April 28 through June 30.

“It isn’t quite as good as we hoped for,” said Dan Garton, Continental’s chief financial officer. Garton, who noted that other carriers’ results had also fallen below expectations, blamed deeply discounted airline fares for depressing profits.

Despite cutbacks made during its nearly 2 1/2 years of bankruptcy protection, Continental said it will take further steps to reduce operating costs and capacity. Among the cutbacks:

* Eliminating 2,500 full-time jobs by the end of the year, primarily through attrition. Continental employs 42,000 people.

* Dropping service to three U.S. cities--Bismarck and Minot, N.D., and Spokane, Wash.--and eliminating unprofitable flights from its Denver hub to Detroit, Milwaukee and Honolulu. It will also withdraw service between Cleveland and Dallas.

* Shutting down money-losing operations to Australia and New Zealand. From the West Coast, competing airlines offer shorter, nonstop flights to the region, contrasted with Continental’s one-stop flights via Honolulu.

* Closing its Vancouver, Canada, office and its Puerto Plata operations in the Dominican Republic.

* Retiring 30 older aircraft by April 30. The airline, as previously announced, will begin receiving new, more fuel-efficient aircraft beginning in January.

The reduction in service and aircraft will cut Continental’s passenger-carrying capacity by a total of about 10%, Garton said. Several other U.S. airlines, such as United Airlines, are also in the process of reducing capacity.

Industry analysts praised Continental’s cost- and capacity-cutting moves in the face of continued sluggishness in airline travel at home and abroad.

“They are coming to grips with the true business environment,” said John Stodden, transportation analyst at Duff & Phelps/MCM, a Chicago-based investment research firm. “It would be very easy not to continue to take the dose of castor oil. But they are.”