Continental Airlines Reaches Cost-Saving Agreement

Continental Airlines today
issued the following bulletin to employees: Continental Airlines announced today that it has finalized wage and
benefit reductions and work rule changes for its Field Services Division,
which includes domestic airport ticket, gate, ramp, operations and cargo
agent employees. The reductions, which total $99 million annually, will
take effect on Feb. 28, 2005, and involve changes to wages, FLEX credits,
holidays, the 401(k) savings plan, overtime and other work rules. These
changes are part of Continental’s previously announced $500 million
reduction in annual wage and benefit costs.

The work rule changes will increase productivity, resulting in financial
savings for the company. The work rule changes resulted in smaller hourly
rate reductions for the work group than would otherwise have been
necessary. Continental will be communicating the details of the Field
Services Division’s reductions with the employees of that division.

“Both directly, and through their employee involvement team, our agents’
suggestions and recommendations reduced what would otherwise have been
larger cuts in hourly rates and other benefits,” said Bill Meehan,
Continental’s senior vice president of airport services. “In many cases,
our agents identified solutions that preserved benefits that were
important to them and their co-workers.”

Continental announced $48 million of pay and benefits changes for
management and clerical employees on Dec. 14, and $22 million in similar
changes for reservation and Chelsea employees on Dec. 16.

The combined savings of management and clerical, reservations, Chelsea and
Field Services total $169 million of the $500 million needed in annual pay
and benefits reductions. Continental has already identified $1.1 billion
in annual cost-savings and revenue enhancements prior to announcing the
needed pay and benefit reductions.

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Continental continues to work with each of its other work groups to
develop a package of wage and benefit reductions and work rule changes
appropriate for each work group, as part of its previously announced $500
million of annual reductions in wages and benefits. Continental expects
that the savings for each work group will be effective Feb. 28, 2005.
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