Fri, Mar 18, 2005
Ratification Of New Employee Agreements Crucial
Continental predicts a
loss for the first quarter and a "significant" loss for the year
according to its filing with the SEC. A bulletin warned employees
the company will have to take several serious steps if the
tentative agreements are not ratified by March 30th.
These actions include even larger cuts in pay and benefit
reductions, up to a total of $800 million from the $500 million
already discussed. Also, additional personnel would be furloughed
as the airline would sublease or sell 24 Boeing 737-500s that have
become less profitable in the current environment.
In addition, multiple aircraft orders that were cleared a few
weeks ago by the board will have to be cancelled if the
ratifications do not go through. As if that wasn't enough, the
airline would have to cough up another $335 million in cash
reserves, limiting operating and pension funds.
The SEC filing indicated that Continental has between $1.3
billion to $1.4 billion available in unrestricted cash and
short-term investments, down from $1.46 billion the company had at
the end of 2004. Bookings through March were strong, with a slight
decrease in April bookings because of and early Easter this
year.
A newly approved 777 non-stop flight to China from Newark is one
bright spot in the company's future. "The Beijing route holds
exceptional long-term promise since it connects the world's fastest
growing economy with the financial center of the U.S.," said
Continental Chairman and CEO Larry Kellner in a news release on
Friday.
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