WASHINGTON (Reuters) - Continental Airlines (CAL.N) said late on Thursday it would seek $500 million in annual wage and other concessions from its workers to avert more losses largely caused by record high fuel prices.þþ``This is a difficult and painful decision, but we need to take this action now, before we find ourselves in a severe crisis,'' Continental Chief Executive Gordon Bethune said in a statement.þþ``While a competitive financial analysis would support our asking for substantially larger reductions, $500 million is the absolute minimum we need to be a survivor,'' Bethune said.þþHouston-based Continental said the austerity measures aimed at workers follow $1.1 billion in yearly cost savings and revenue enhancements that were previously announced.þþContinental reported a net loss of $157 million for the first nine months of 2004 and projects more red ink in 2005.þþThe airline has resisted employee givebacks during the industry's financial slide, which was accelerated by the Sept. 11, 2001, attacks on the United States. But cost-cutting drives and unprecedented steps to force savings on workers at some of Continental's biggest rivals this fall have put new pressure on the No. 5 carrier to turn to its employees for help.þþEarlier this month, Delta Air Lines (DAL.N) won $5 billion in concessions over five years from its pilots to avert an immediate Chapter 11 filing, and US Airways (UAIRQ.OB) received approval from a bankruptcy judge in October to cut worker pay by more than 20 percent through mid-February.þþUnited Airlines (UALAQ.OB), like US Airways, is threatening to throw out labor contracts and dump expensive pension plans in bankruptcy court to get deeper savings from its thousands of unionized workers. þþPAINFUL IMPACT OF OIL OVER $50þþWith business picking up this year, experts point to soaring fuel prices -- with crude above $50 per barrel this fall -- and high labor costs as the reasons for the newest round of losses at the biggest airlines. The situation is more severe at the biggest airlines because they have had to slash fares to compete with discounters, which as a group have much lower labor costs.þþThe seven biggest U.S. airlines lost more than $5 billion through the third quarter of this year.þþ``If fuel had not jumped, Continental had no intention of going after its employees,'' said Michael Boyd, an aviation industry analyst based in Evergreen, Colorado. ``It's a last resort.''þþContinental said it is discussing concession packages covering pay cuts, as well as changes in benefits and work rules with its labor groups. The airline wants to have savings in place by Feb. 28, 2005.þþUnionized workers would have to ratify any concession agreement.þþThe airline said top management would participate in givebacks. For example, Larry Kellner, currently president and chief operating officer, will take a 25 percent cut in salary and benefits when he takes over from Bethune in February.þþContinental's pilots, represented by the Air Line Pilots Association, did not rule out givebacks. But the union said it would examine any proposal closely to see if cuts are truly needed or just wanted by the company.þþ``If a need is established, this process must include securing appropriate returns for our investment when the airline returns to profitability,'' said Jay Panarello, chairman of the pilots' union at Continental.þþContinental will offer ``eligible employees'' enhanced profit-sharing programs in return for cuts and will continue employee incentive programs.þþThe International Association of Machinists, which represents the company's flight attendants, had no immediate comment because it had not seen a proposal.þþþþ
Source: NY Times
