Continental Airlines is to cut 1,700 jobs amid a drop-off in revenue and passenger numbers, as it announced widening quarterly losses of $214m between April and June.

It blamed the slump on business passengers either forgoing travel or opting for cheaper tickets.

The staff cuts were part of “aggressive steps to increase revenue and reduce costs”, Continental’s chief executive Larry Kellner said. The redundancies will include management positions and are expected to save $100m by next year.

The carrier had previously cut 500 jobs for reservation agents and given leave of absence to 700 flight attendants.

The U.S. airline is also increasing its fees for checking in bags and for telephone booking.

Other US rivals fared better, with both United and Southwest reporting profits for the same period.

UAL, United’s parent firm, said it made a second-quarter profit of $28m thanks to fuel hedge gains, accounting charges and other one-off items. But it warned of underlying weakness, as losses would have totalled $328.6m were it not for these gains.

UAL said it would be cutting its international flight capacity by 7% in the last four months of 2009.

The news was brightest from Southwest Airlines, which reported its first quarterly profit in a year, with earnings of $54m – although this was sharply down on the same period in 2008, when it made $321m.