This is a multi-part message in MIME format. ------=_NextPart_000_0048_01C5369C.54EF63A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit Continental Flies Lean and Mean <http://www.thestreet.com/tsc/c.gif> By <http://apps.thestreet.com/cms/email/tscEmailStory.do?storyId=10215622&a uthorId=1100297&storyUrl=/markets/rosssnel/10215622.html> Ross Snel TheStreet.com Staff Reporter 4/1/2005 7:01 AM EST <http://find.thestreet.com/cgi-bin/texis/author/?au=A1100297> Click here for more stories by Ross Snel <http://ad.doubleclick.net/jump/thestreet.com/markets;kval=rosssnel;' + rsistring + 'abr=!ie4;abr=!ie5;ord=1112365136416?> By voting against a new contract, Continental Airlines' ( <http://tools.thestreet.com/tsc/quotes.html?pg=qcn&symb=CAL> CAL:NYSE - <http://find.thestreet.com/cgi-bin/texis/find/results.html?tkr=CAL> news - <http://thestreet.investor.reuters.com/reports.aspx?ticker=CAL> research) flight attendants may have set themselves up for only greater sacrifices in the future. The 7,570 Continental flight attendants represented by the International Association of Machinists and Aerospace Workers, or IAM, now find themselves isolated after leaders of three other unions -- representing pilots, mechanics, dispatchers and flight simulator technicians -- decided to move forward with concessions. With all of its other major labor groups on board, Continental says it will have no choice but to ask flight attendants for even larger cuts. "The current levels of pay and benefits for flight attendants are not sustainable," the airline said. "The company will promptly re-engage in discussions with the flight attendants to reach a revised agreement on pay and benefit reductions. Unfortunately, the needed pay and benefit reductions under that agreement will be larger. The longer this process takes, the deeper the pay and benefit reductions will be in order to achieve the needed cost savings." Continental also made clear on Thursday the rewards for employees willing to accept concessions when it announced it would issue options on 8.7 million shares of common stock to all domestic employees except flight attendants. It's unclear what steps the flight attendants will now take. An IAM spokesman said the union wasn't commenting beyond a statement posted on its Web site announcing members' rejection of their agreement. Flight attendants at other airlines -- notably US Airways ( <http://tools.thestreet.com/tsc/quotes.html?pg=qcn&symb=UAIRQ> UAIRQ:OTC BB - <http://find.thestreet.com/cgi-bin/texis/find/results.html?tkr=UAIRQ> news - <http://thestreet.investor.reuters.com/reports.aspx?ticker=UAIRQ> research) and United Airlines parent UAL ( <http://tools.thestreet.com/tsc/quotes.html?pg=qcn&symb=UALAQ> UALAQ:OTC BB - <http://find.thestreet.com/cgi-bin/texis/find/results.html?tkr=UALAQ> news - <http://thestreet.investor.reuters.com/reports.aspx?ticker=UALAQ> research) -- weren't shy about threatening work disruptions late last year. However, it may be tough for Continental's flight attendants to take drastic measures, now that the other unions have agreed to concessions with management. Continental says it's now on track to save $418 million a year in annual pay and benefits. In addition to concessions approved Wednesday by Continental's pilots, mechanics, dispatchers and simulator technicians, the savings includes earlier agreements reached with management, clerical workers, and customer service agents. Continental's savings fails to meet the $500 million annual target it had set for itself. But analysts said it's more than a step in the right direction for the airline. "This should ... solidify Continental's place as one of the leanest legacy airlines," wrote Susan Donofrio, an analyst at Fulcrum Global Partners. We also think this will be a catalyst for wage concessions at other airlines." Fulcrum neither does investment-banking business with Continental nor makes a market in its securities. Go to <http://www.thestreet.com/_excite/markets/rosssnel/10215622_2.html> NEXT PAGE ------=_NextPart_000_0048_01C5369C.54EF63A0 Content-Type: image/gif; name="c.gif" Content-Transfer-Encoding: base64 Content-Location: http://www.thestreet.com/tsc/c.gif R0lGODlhAQABAID/AMDAwAAAACH5BAEAAAAALAAAAAABAAEAAAICRAEAOw== ------=_NextPart_000_0048_01C5369C.54EF63A0--
