Continental reaches tentative labor dealreports that Continental Airlines has secured agreement on wage and benefit reductions that management claimed were necessary to the short- and long-term fiscal health of the Houston-based carrier:
Continental Airlines on Monday reached its target of half a billion dollars in worker concessions, a goal the carrier said it had to reach to stay afloat in today's tough industry environment.
The Houston-based carrier announced tentative wage and benefit reductions worth about $330 million that would be part of new contracts for thousands of unionized employees, including pilots, flight attendants, mechanics and dispatchers.
Continental previously detailed $169 million in reductions to nonunion employees' salary and benefits.
In November, Continental said it needed worker concessions worth $500 million. Since then, it has sounded dire warnings. In January, Continental said if it didn't hit the concessions target, it could run out of cash.
Monday, Chairman and Chief Executive Officer Larry Kellner acknowledged that reducing pay and benefits is painful but stressed that the cutbacks "will put in place the tools we need to be successful and grow our company, securing the careers and retirement of all Continental employees."
Union members will have to approve the agreement.
Former CEO Gordon Bethune, widely credited for turning around Continental Airlines, enjoyed good labor relations during his tenure, no doubt explaining part of the successful turnaround he led. In winning the labor deal management sought, handpicked successor Larry Kellner appears to have successfully navigated some early turbulence in his own tenure.