News Release
Continental Airlines Begins Furlough Process
HOUSTON, September 20, 2001 -- Continental Airlines (NYSE: CAL) today began its previously announced furlough process, which includes the closure of its Denver Reservations Center and Los Angeles flight attendant base.
Last week CO announced that, as a result of the tragic terrorist attacks on the United States, it would reduce its schedule for the long term by 20 percent, resulting in the furlough of about 12,000 employees. All of the U.S.-based employees will be notified today and tomorrow. Notice to international employees will be completed by early next week.
Subsequent to Continental's announcement, other major airlines and suppliers have announced furloughs and schedule reductions. Tens of thousands of additional furloughs are expected. Those that have announced furloughs and/or pay cuts include:
- American Airlines - 20,000
- United Airlines - 20,000
- The Boeing Company - 30,000
- Honeywell - 12,000
- US Airways - 11,000 and anticipated pay cuts
- British Airways - 7,000
- America West Airlines - 2,000
- Virgin Atlantic - 1,200
- American Trans Air - 1,500
- Midwest Express - 450
- Frontier Airlines - 440
- Mesaba - undetermined furloughs and significant pay cuts
- KLM - 10 percent of workforce
Those that have already announced schedule reductions, which will almost certainly result in significant layoffs, include:
- Northwest Airlines - Reduced its schedule by 20 percent
- Delta Air Lines - Reduced its schedule by 20 percent
- Aer Lingus - Reduced its operations by 25 percent
- AirTran - Reduced its schedule by 20 percent and significant pay cuts
Continental's furlough affects employees in every area of the company, including management, pilots, airport agents, flight attendants, technicians, reservations agents, material services and others. The breakdown of furloughed employees includes:
- Approximately 1,100 management and approximately 400 clerical employees
- Approximately 1,000 pilots
- Approximately 3,000 airport agents
- Approximately 475 technicians, which includes the closure of line maintenance bases in Kansas City, Miami, Washington, D.C., Greensboro and Albuquerque
- Approximately 1,200 reservations agents
- Approximately 1,800 flight attendants
- Approximately 700 Chelsea Catering employees
- Approximately 600 Continental Express employees
- Approximately 250 Continental Micronesia employees
Early retirements and Company Offered Leaves of Absence (COLA) are expected to significantly offset the total number of 12,000 job cuts. In addition, because of Continental employee seniority rights and the option for more senior employees to consider relocation, the exact number of employees furloughed in each location cannot be determined at this time.
"Numerous airlines - and many other industries - have been forced to reduce their staffs by tens of thousands due to the drops in air travel," said Continental Chairman and CEO Gordon Bethune. "We are truly sad that this airline has been forced to furlough our hard-working co-workers, but we are fighting to save this industry so that they may return to us one day."
To reduce the number of furloughs, Continental has offered eligible non-management employees COLAs. The number of employees that accepts COLAs will further offset the number of furloughs.
At the time of furlough, Continental is giving affected employees information about state unemployment benefits. Furloughed employees also will be receiving severance payments in accordance with their work rules.
Continental also is closing its Denver Reservations Center, which will eliminate approximately 950 jobs. However, due to their seniority, many Denver Reservations agents will have the option of transferring to other reservations centers in Houston, Salt Lake City and Tampa. The closure of the Denver Reservations facility offers significant cost savings that help to reduce the number of job furloughs.
The carrier will be holding Outplacement Job Fairs in its hub cities so that furloughed employees can meet with employment assistance professionals, representatives from governmental agencies and staffing managers of other companies who are hiring new personnel.