Mon, Apr 04, 2005
Flight Attendants Stand Alone
Continental Airlines
announced Thursday that its pilots, mechanics, dispatchers and
simulator engineers ratified the new collective bargaining
agreements that they had been working on. The flight attendants
were the only group that did not ratify their agreement.
"I recognize that these pay and benefit reductions are painful,
and I appreciate that our pilots, mechanics, dispatchers and
simulator engineers made the decision to support their co-workers
and our airline," Continental Chairman and Chief Executive Officer
Larry Kellner said in a news release. "While I am disappointed that
the flight attendants failed to ratify their agreement, I believe
they recognize our need for cost reductions and want to support our
co-workers, but were influenced by other factors."
The company will proceed with previously announced pay and
benefit reductions for airport, cargo, reservations, Chelsea food
services, management and clerical employees. The airline's officers
and board of directors implemented their own reductions at the end
of February.
Continental expects to save about $418 million annually with the
implementation of these programs. The company claims that current
levels of pay and benefits for flight attendants are not
sustainable, and plans to reengage in negotiations with the flight
attendants. The airline claims that the longer the process takes,
the deeper the reductions will have to be.
With most of the agreements ratified, Continental will proceed
with delivery of the aircraft under its previously announced Boeing
aircraft order. The company will lease eight Boeing 757-300
aircraft this summer and accelerate delivery of six Boeing 737-800
aircraft into 2006. The airline will acquire ten Boeing 787
aircraft beginning in 2009.
Continental has issued to all domestic employees, except flight
attendants, stock options for approximately 8.7 million shares of
Continental's common stock as a result of the ratifications. These
options amount to about 13 percent of the currently outstanding
shares of common stock of Continental and have an exercise price of
$11.89 per share. The company's previously announced enhanced
profit-sharing program also became effective for all employees
participating in the pay and benefit reductions.
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