Continental seeks $500 million from workers
Continental Airlines, the seventh-largest U.S. air carrier, said it will ask employees for $500 million in annual payroll and benefit givebacks in order to help the company return to profitability.
Continental plans to implement the reductions Feb. 28 and will meet with unions to discuss how the package of reductions will be spread across the company. The reductions are in addition to $1.1 billion annual cost savings and revenue enhancements the airline had previously announced.
“This is a difficult and painful decision, but we need to take this action now, before we find ourselves in a severe crisis,” said outgoing Chairman and Chief Executive Gordon Bethune. “While a competitive financial analysis would support our asking for substantially large reductions, $500 million is the absolute minimum we need to be a survivor.”
The company has lost hundreds of millions of dollars since Sept. 11, 2001, and expects to lose hundreds of millions of dollars more in 2004.
Employees at other major airlines have also been forced to reduce wages or work longer hours in order to help their companies stave off bankruptcy or reorganize while under federal protection.
Continental seeks $500 million from workers
