| Continental Airlines is one of the leading carriers in the | | | | growth of low-cost domestic carriers. Although, one |
| United States. Its history started in 1934 with Mr. | | | | the Continental's strength and ways out of this |
| Walter Varney establishing the airlines called after him | | | | situation is having a great number of international |
| Varney Speed Lines at El Paso International Airport. A | | | | routes. As a matter of fact, Continental has more |
| couple of years later Mr. Robert Six took over the | | | | international destinations than any other U.S. airline. |
| company and moved headquarters to Stapleton | | | | Since September 11, 2001 when the company started |
| Airport in Denver, Colorado. Six ran the company for | | | | experiencing substantial losses one of the most |
| forty years. In its sixty eight year history the | | | | crucial goals and objectives for Continental became |
| company went through two bankruptcies, in 1983 | | | | any possible cost cutter. Of course, the easiest way |
| and 1991. | | | | to cut the operation costs is to decrease the labor |
| On February 29, 1996, the Wall Street Journal | | | | costs. Continental changed wages, work rules and |
| reported that Continental gave its shareholders the | | | | benefits for all employees except the flight |
| fifth best return of any public company during 1995 | | | | attendants and certain employees of wholly-owned |
| and ranked it number one among eight other airlines | | | | subsidiary Continental Micronesia, Inc. ("CMI") who are |
| with a return that was 213.9% above the peer | | | | subject to collective bargaining agreements. Company |
| average. Continental's stock was trading near its | | | | began implementing changes in early April 2005, |
| 52-week high point. Continental was growing, serving | | | | which, when fully implemented, are expected to |
| more and more cities all over the world. On July 17, | | | | result in approximately $418 million of annual pay and |
| 1996 the company split its stock 2 for 1. A number | | | | benefits cost savings on a run-rate basis. |
| of times Continental was named one of the "100 | | | | Despite all the difficulties the company continues to |
| best companies to work for". Everything was going | | | | grow. It is very important that Continental |
| just fine until September 11, 2001. Along with World | | | | management understands that even substantial cuts |
| Trade Center buildings the airline business collapsed. | | | | in labor costs will not bring the company back to the |
| When in 2000 Continental generated $342 million of | | | | long-term profitability. That is why Continental Airlines |
| net income then in 2001 it was $95 million loss and in | | | | expand even more. By 2007 they plan to open a first |
| 2002 company experienced net loss of $451. It | | | | non-stop from the United States route to Shanghai. |
| seemed that the second quarter of the present year | | | | The company also expects the delivery of 34 Boeing |
| went well for the company; finally one can see | | | | aircrafts by the end of 2006 and another 44 aircrafts |
| positive numbers on the financial reports of the | | | | from 2008 till 2011. The numbers clearly show that |
| company ($100 million dollars of net income for the | | | | Continental Airlines expect on growing and apparently |
| 2nd quarter). However, another great challenge for | | | | improving the financial figures. Most people probably |
| Continental, just as for any other airline, happened to | | | | think that it is unethical to cut workers' wages and |
| be the sufficient increase in the prices for fuel. Apart | | | | expand the company at the same time. However, if |
| from high fuel costs that sufficiently affect the | | | | Continental chose to reduce its business how many |
| profitability of the company Continental also | | | | workers would lose their jobs in this case? |
| experiences high labor costs for flight attendants, | | | | The expanding strategy is the good plan to come |
| excessive taxation, increased security costs and | | | | back to the profitability, only if the concept of |
| significant pension liabilities. Continental management | | | | "economies of scale" works in this situation. By |
| views present U.S. domestic network carrier financial | | | | expanding Continental consequently will have to |
| environment as poor and could deteriorate further. | | | | increase their labor force and along with cutting |
| Another threat Continental Airlines being the 5th | | | | wages and benefits for employees it could be a |
| largest carrier in the U.S. and 6th in the world is the | | | | tough task. |