Airline Can Now Approve Purchase Of 787s

If Continental and its labor unions approve wage and benefit concessions now in the works, it could end up being very good news for Boeing.

If Continental can bring its budget in line, with the help of labor unions like the ALPA, it plans to lease eight 757-300 aircraft starting this summer, accelerate delivery of six 737-800 into 2006 and acquire ten 787 aircraft beginning in 2009.

"The Boeing Company and Continental have agreed to extend for one month the period for [Continental's] board approval of their previously announced aircraft acquisition agreement," the airline said in statement to ANN Monday.

Continental plans to put its new 757-300 aircraft in service as early as next July. The airline plans to acquire six 737-800 aircraft next year instead of waiting until 2008 as had been planned. The 787s will be used on international routes.

Continental expects its new labor agreements to save the airline $500 million a year, excluding some 10 million stock options expected to be issued to employees as part of the bargain. Like many other legacy carriers, Continental continues to hemorrhage red ink, reporting a fourth quarter 2004 loss of $206 million.

"Even though we closed 2004 with a significant loss, Continental took many steps last year that are helping to position us for a stronger future," said Chairman and Chief Executive Officer Larry Kellner in January. "Continental employees continue to deliver outstanding, industry-leading service, and that consistency is a solid foundation for our efforts to restore profitability."

FMI: www.boeing.com, www.continental.com