Continental Airlines (NYSE: CAL) today
confirmed that it expects to avert over 1,000 furloughs through its voluntary
Company Offered Leave of Absence (COLA) program. The company also confirmed
that, as part of last week`s furlough, it provided severance packages to
furloughed employees and honored all severance and furlough pay provisions
contained in its work rules and collective bargaining agreements, with a total
cost estimated at more than $60 million. It also said that all of its
employees, including management, are sharing in the financial pain of the
industry downturn through a lack of profit sharing and incentive compensation.
In an effort to reduce as many employee furloughs as possible, Continental
introduced its COLA program. The COLA encourages voluntary leaves of absence
for non-management employees and allows them to accept full-time work
elsewhere while continuing to receive benefits during an unpaid leave of up to
one year. Benefits include the option to continue insurance benefits at
company rates, continuing travel privileges and credit for time on COLA for
company seniority and the employee retirement program. The company also has
offered an Early Out program for eligible U.S.-based employees system-wide.
In connection with last week`s furlough, the company provided severance
packages to furloughed employees while honoring all severance and furlough pay
provisions contained in its work rules and collective bargaining agreements.
The cost is estimated to be over $60 million. “This furlough was one of the
most painful events we have had to experience,” said Gordon Bethune, chairman
and chief executive officer. “We believe that employees should always be
treated with dignity and respect, especially when we are forced to make these
All Continental employees, including management, are sharing in the
financial pain of the industry downturn. Profit sharing, which has paid out
over $545 million to employees over the past six years, will not be paid this
year. Management compensation will be dramatically reduced for 2001, since it
is primarily based on performance bonuses and incentives. In addition,
management stock options have become worthless. As a result of this
widespread financial pain, Continental is not asking any of its employees for
pay cuts. Continental believes that this policy will allow its remaining
workforce to be more effective in doing the hard work required by this crisis.
Continental also is providing continuing job placement, including a series
of outplacement seminars/workshops for displaced co-workers in numerous
cities, including Houston, Cleveland, Newark, Denver and Los Angeles.
Continental is also working closely with representatives of many state
agencies and hiring authorities from local companies who have expressed
interest in interviewing employees. Continental Human Resources
representatives are available at all outplacement events to assist with
benefits, resume preparation and interviewing tips.
Prior to Sept. 11, Continental was one of only two major domestic airlines
reporting profits in the first half of the year, and was profitable in July