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CONTINENTAL HALTS PILOT FURLOUGHS TO MINIMIZE IMPACT ON CONTINENTAL EXPRESS

 

Continental Airlines (NYSE: CAL) today announced it will eliminate further pilot furloughs this year to minimize pilot training and costs at Continental Express as a result of the flow of pilots from Continental to Continental Express under a flow-through agreement.

Under terms of the flow-through agreement with Continental's pilots, furloughed Continental Airlines pilots have the option to work as pilots for Continental Express, resulting in furloughs of existing Continental Express pilots. Continental had previously announced a furlough of 100 Continental pilots scheduled tobegin in March. This furlough will not occur.

Continental Express had projected the inflow of these 100 Continental mainline pilots would result in training and other costs for the subsidiary and contribute to  as many as 250 furloughs.

"By eliminating further pilot furloughs, Continental can avoid significant training challenges at Continental Express while we focus on separating our ownership interest in Continental Express," said Capt. Deborah L. McCoy, senior vice president of Continental's Flight Operations.

Continental filed with the U.S. Securities and Exchange Commission (SEC) last summer for an initial public offering of Continental Express, but decided to postpone the offering after Sept. 11. Continental recently announced that it intends to continue pursuing a strategy of separating the ownership of Continental and Continental Express, while noting that the structure and terms of the offering will be revised and that timing of an IPO is uncertain.

Since capacity at Continental was reduced following Sept. 11, Continental has furloughed a total of 439 pilots from mainline operations. Of this number, 233 pilots took positions at Continental Express, contributing to the furlough of 386 Continental Express pilots.

Continental does not anticipate that its decision will affect its previously announced guidance concerning 2002 capacity.