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Continental Says Pilots Agree To Pay Freeze, Other Cost Saving Measures

January 16, 1991

HOUSTON (AP) _ About 3,900 Continental Airlines pilots have agreed to a temporary pay freeze and other cost-saving measures, the company said Tuesday as it tries to control costs in reorganizing under federal bankruptcy laws.

The Pilot Operations Group also agreed to defer bonus payments that are based on fuel saved during flights, as well a slight reduction in flying hours and a 30 percent cut in the company’s cost for crew meals, Continental said.

″This accord will make a tremendous positive difference for our company,″ Continental chairman Hollis Harris said in a statement.

″While we maintain a pledge to serve our customers with business as usual, we simply must take the position of not increasing costs. Through this agreement our pilots have shown that they recognize this,″ Harris said.

″We felt that this was an opportunity for us to get behind him (Harris) because we do have the goal of getting the company through the fuel crisis and Chapter 11,″ Bob Rinehart, chairman of the Pilot Operations Group, said in a message to the pilots.

Continental spokesman Dave Messing said he was not sure how much money Continental hoped to save through the measures announced late Tuesday.

Continental Airlines Holdings Inc., the Houston-based airline’s parent, filed for protection from creditors in early December, saying it was overwhelmed by its debts and surging fuel prices. It was the carrier’s second bankruptcy filing in seven years.

Continental also said it altered its benefit programs to include a retroactive extension of the retirement program’s service credit period, giving long-time employees better retirement benefits.

The company also will eliminate service charges for travel by employees with more than 10 years of service and will establish a legal aid fund to help protect employees’ interests in Continental’s bankruptcy reorganization case and related transactions.

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