Continental Air Flies Lean and Mean Page 2

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Continental Air Flies Lean and Mean
Page 2 	 	 	


 
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On Wednesday, it wasn't clear whether one union's rejection of its new
contract would scuttle all of the union agreements that were up for
ratification. Continental had warned in regulatory filings that each
agreement could be contingent upon the others. 

And the Air Line Pilots Association, which represents about 4,125
Continental pilots, had warned in firm language Wednesday that even
though its members had approved their agreement, it had the right to
pull out of the contract. 


"This pilot group has a record of leadership at Continental and again
has stepped up to help the company survive by accepting concessions of
$213 million annually," ALPA said in a news release. "However, any
concessions from this pilot group have always been based on the
condition that all employee groups share in the cost cuts." 


Later, however, ALPA decided to go ahead with its concessions, even
though it had received word the flight attendants had likely voted
against their agreement. An ALPA spokesman declined to say why union
leaders had not insisted on all groups agreeing to savings. 


But ALPA leaders may have decided it wasn't worth risking even greater
concessions down the road. Continental had warned that if unions didn't
approve the current round of concessions, it would be forced to resort
to even harsher cost-cutting, including raising its overall labor
savings target from $500 million to $800 million. 


A spokesman for the International Brotherhood of Teamsters, which
represents Continental's 3,475 mechanics, said the union went ahead with
concessions to help save the company and protect mechanics' jobs. "It's
a tough choice and a difficult situation," he said, adding that the
union hoped Continental would in the future reward workers for showing
faith in the company. 


The airline had also threatened to cancel or defer airplane orders, but
now says a key order with Boeing (
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research) -- to lease eight 757-300 jets and take early delivery of six
Boeing 737-800s -- is on track. Continental also expects to follow
through with the acquisition of 10 next-generation 787 Dreamliners from
Boeing in 2009. 


Donofrio at Fulcrum Partners said the three unions' decision to go ahead
with concessions are a "positive testament" to employee relations at the
airline and shows the unions' realization that labor savings are
necessary for the airline in the industry's tough environment. 

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