After an eight-month holdout, Continental Airlines' flight attendants reached a tentative contract agreement with the carrier Thursday that lets them keep their current pay longer than under pacts with pay concessions that other unions already accepted.
The International Association of Machinists and Aerospace Workers, which represents Continental's flight attendants, said in a release that the tentative four-year pact also has a no-furlough clause and includes language to allow the crews to rest more and to enhance participation in profit sharing and stock option plans.
The nation's fifth-largest carrier also agreed to contribute to the IAM national pension plan at the discretion of the IAM and the Continental flight attendant membership. The IAM plan would be activated immediately if the current Continental Airlines retirement plan is frozen or terminated.
"Our members demanded we prevent the massive pay cuts and pension losses suffered by flight attendants at other carriers, and we succeeded," said William O'Driscoll, President of IAM District 142.
Larry Kellner, Continental's chairman and chief executive, thanked the IAM leadership and its negotiating team for working with the carrier to meet a deadline for an agreement set by the National Mediation Board. "Now, we must go forward and get this agreement ratified," Kellner said in a statement.
The flight attendants will vote to ratify the agreement Jan. 18-29. A separate, simultaneous strike vote also will be taken.
In late March, Continental reached 45-month pay and benefit cut agreements with its largest unions, except the airline's more than 8,000 flight attendants. The deals approved by pilots, mechanics and other unions, along with $169 million in wage and benefit cuts affecting nonunion employees, reached about $418 million of the carrier's goal to cut costs by $500 million to combat continued losses and soaring jet fuel prices.
But flight attendants balked at having to provide the majority of the remaining $82 million in savings through pay and benefits concessions in another 45-month pact. In June the nation's fifth-largest carrier asked the National Mediation Board to appoint a mediator to help with on-and-off talks, which had failed to produce a deal.
The tentative deal reached Thursday allows the airline to capture those savings by stretching its deal with flight attendants another three months.
"We are confident that we've captured the full contribution needed from our flight attendants," Continental spokeswoman Julie King said, declining to discuss terms of the deal further.
Continental said earlier this year the airline expected significant losses in 2005, but projected cash flows and reserves would be enough for the year if unions approved the cuts. The carrier lost $184 million in the first quarter, but posted profits of $100 million and $61 million in the second and third quarters, respectively.
Continental shares closed Thursday down 33 cents at $17.31 on the New York Stock Exchange, at the high end of its 52-week range of $8.50 to $17.88.
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