In a bulletin to employees, Continental Airlines represented possible actions included in its 10-K filing with the Securities and Exchange Commission as required. “The filing is likely to generate media coverage because SEC regulations require that Continental provide detailed information on its future prospects, including what actions Continental will be forced to take if the tentative union agreements are not ratified on March 30.”
Actions listed include increasing the size of needed pay and benefit cuts from $500 million to $800 million.
Continental could also be forced to sublease or sell 24 Boeing 737-500 aircraft. If it occurs, Continental said, “This mainline fleet reduction will result in frequency reductions and aircraft gauge downsizing in various markets.”
In addition to disposing of aircraft, Continental said it could be forced to cancel aircraft orders. Its contingency plan includes canceling plans to lease eight 737-300 aircraft, canceling accelerated delivery of six 737-800 aircraft, canceling orders for 10 new 787 aircraft. And finally, Continental could be forced to discuss with Boeing deferring all 40 remaining aircraft on order that are scheduled for delivery beyond 2005.