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Continental was the first airline to file for bankruptcy with a plan to continue operating as it did continuously starting September 27, 1983. Airline unions fought Continental at every step. On October 1, 1983, the pilots and flight attendants joined the IAM, which was still on strike.
With this tool, airline managers reduce costs. Terms of an employee contract negotiated over years can be eliminated in months through Chapter 11. Terms of the Railway Labor Act, amended in 1936 to cover airlines, prevent most labor union work actions before, during and after an airline bankruptcy. Continental Airlines declared bankruptcy ...
The average salary of Continental's pilots after the bankruptcy filing was 30% to 50% lower than before the filing. [72] Senior Management also reduced their salaries to those of the pilots. [73] Continental was the first airline to largely gradually replace a pilot workforce. The pilots eventually voted their union out.
In September 1983, Continental filed for Chapter 11 bankruptcy, stating that its high labor costs prevented it from effectively competing with non-union startup carriers and the new two-tier wage scales by its major competitor American Airlines. [9] The bankruptcy filing allowed Continental to fire 8,000 employees, and subsequently rehire a ...
The airline entered Chapter 11 bankruptcy on August 11, 2002, but received a government-guaranteed loan through the Air Transportation Stabilization Board and was able to exit bankruptcy in 2003 [35] after a relatively short period. The airline made major cost reductions during its bankruptcy, but it still encountered higher-than-average per ...
It filed for bankruptcy in 2002, emerging in 2006 after restructuring, and in 2010, United merged with Continental Airlines, forming one of the world’s largest carriers. The new airline retained the United name but adopted Continental’s globe logo.
Continental Lite was developed by Continental Airlines to counter the rise of low-cost start up carriers. This despite the fact that Continental had some of the lowest costs in the airline industry due to many of the trade labor unions agreements being tossed out during Frank Lorenzo's reign with Continental through Chapter 11 bankruptcy.
Use of bankruptcy law to abrogate labor agreements and impose lower market wages as pursued by Continental Airlines in its 1983 bankruptcy. [19] Lower pay scales for new hires (retaining higher pay scales for legacy employees), as pioneered by American Airlines in 1983. [20] [21]