Continental Air Forges Ahead - TheStreet

Updated from 3/30/05

The union representing

Continental Airlines'

(CAL) - Get Report

flight attendants is finding itself out in the cold.

Leaders of three other unions -- representing the airline's pilots, mechanics and flight dispatchers -- have decided to go ahead with pay and benefit reductions even though flight attendants failed to ratify a new contract. Their decisions will help Continental achieve $418 million in annual labor savings, a number that falls short of the airline's $500 million target.

Members of the other three unions ratified new contracts by Wednesday's deadline. But tentative agreements their leaders had reached with the airline allowed them to back out if other labor groups failed to ratify their own agreements.

The arm of the Air Line Pilots Association representing Continental pilots noted as much in a statement it issued late Wednesday after members approved concessions.

"Any concessions from this pilot group have always been based on the condition that all employee groups share in the cost cuts," said Capt. Jay Panarello, chairman of ALPA's Master Executive Committee for Continental, in the statement.

But after several hours of deliberation, the MEC voted to accept the pilots' new contract "without waiting for the results of the flight attendants' membership vote," a later statement said.

Continental said it will have to return to the bargaining table with the International Association of Machinists and Aerospace Workers, which represents the flight attendants. But this time, the airline will seek even larger pay and benefit reductions, it said in a new release. "The longer this process takes, the deeper the pay and benefit reductions will be in order to achieve the needed cost savings from the flight attendants and to be fair to their co-workers who have taken reductions," the release said.

A spokesman for the flight attendants' union did not return a phone call seeking comment.