Continental Expands Rewards for Being on Time

Employees at Continental Airlines have started seeing some cash as the carrier wings its way toward potential profits.

That the Houston carrier is rewarding workers for better performance is an indication that things are finally looking up in what has been a beleaguered industry in recent years.

Continental workers were told Thursday they're getting a $100 bonus for coming in first in on-time performance in September, but they could have finished second or third and still been in the money. The employees several weeks ago received $65 bonuses for the airline's third-place finish in August. That was their first on-time payout since the bonus program was expanded in June. Previously, the carrier was giving the $100 bonus only if the airline was in first place.

Workers also could get even more money if the carrier turns a profit this year, since Continental promised increased profit-sharing if they agreed to big concessions last year.

The reason is that Houston-based Continental, which just last year won about $500 million in cuts from employees, has broadened this bonus program.

Another plus for employees has come in the form of stock-option gains. Continental issued nearly 10 million stock options to employees in 2005 and 2006. With the shares trading at $30, the value of those securities is up $150 million, according to Continental.

Pilots also are eligible for the employee bonuses, but not upper management. Top executives took a pay cut of 20 percent or more when employees agreed to concessions.

While falling jet fuel prices offer the industry the hope of the best results in years, labor peace is hardly a given.

At Northwest Airlines, for example, the company's flight attendants have declared an impasse in negotiations with management of the carrier operating in bankruptcy. The union has asked that the federal mediator release them into a 30-day cooling-off period, after which they could strike.

Continental has labor relations "that distinguish the company from other carriers," Calyon Securities airline analyst Ray Neidl said in a report issued several days ago.

"Management is focused on preserving this culture," Neidl wrote. "Accordingly, the carrier stated that it will preserve its pension plans."

But it's been years since Continental or any of the big hub-and-spoke airlines have turned an annual profit.

Continental employees still are making less than they were before concessions, Capt. Dave Earnest, chairman of the master executive council of the Continental pilots union, said Wednesday.

"While we are looking forward to profit sharing, we are also looking forward to restoring our wages and negotiating substantial improvements," Earnest said.

But that's not going to happen anytime son. Most of Continental's labor contracts, including that of the pilots, extend through the end of 2008.

News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.