Continental Talking Possible Bankruptcy

 
Old Sep 17, 01, 9:46 am
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Continental Talking Possible Bankruptcy

Below are comments from CEO Gordon Bethune as to the state of affairs for Continental.
Let's hope they can ride this one out.

Meanwhile, industry leaders are pleading for federal help. "We need our Congress to intervene and save our industry," Continental's Chief Executive Gordon Bethune said Sunday. "The U.S. airline industry is in an unprecedented financial crisis.

Continental Airline was the first to announce layoffs - 12,000 or 21 percent of its workforce - and warns that it could face bankruptcy as soon as next month

The full text of the article can be found at www.cbsmarketwatch.com
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Old Sep 17, 01, 12:36 pm
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http://biz.yahoo.com/rf/010917/n17353349_2.html

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Continental on Monday said it will miss $70 million in payments on enhanced equipment trust certificates, known as ETCs, which are securities backed by aircraft. Holders of this debt get first claim on the jets in default situations.

The Houston-based company said it has a five to 10 business day grace period starting Monday to make the payments, before it goes into default under its financing agreements.

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Continental Chief Executive Gordon Bethune on Saturday warned that the airline could file for bankruptcy October without government assistance. As many as 100,000 airline jobs could be lost as all carriers lose mountains of money, a total $1 billion since last week. Other industries would suffer, too, he said.


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Old Sep 17, 01, 7:30 pm
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when continental entered bankruptcy in the early nineties, did frequent fliers emerge with the same number of miles as prior to the petition?
were there attempts to maintain the loyalty of the most frequent fliers?
what a startling change in business fortunes!
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Old Sep 18, 01, 12:39 am
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According to Continental's last 10-q filed with the SEC, they had 1.008 Billion in Cash
on hand as of June 30th.
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Old Sep 18, 01, 2:04 am
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CO next after Ansett Australia?
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Old Sep 18, 01, 6:41 am
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I wonder if Gordon Bethune will take a pay cut???

He was the highest paid airline CEO last year.

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Old Sep 18, 01, 7:28 am
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Now that's *funny*! Greedy Gordon's salary will probably be the last thing to be trimmed. I hope CO does not go bankrupt. However, if it were to, I can see the proverbial ship going down with the Captain rowing away from it as fast as can possibly be done when the dingy is filled with treasure.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by TrvlGuru:
I wonder if Gordon Bethune will take a pay cut???

He was the highest paid airline CEO last year.

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Old Sep 18, 01, 10:04 am
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Chapter 11 (reorganization) may not be a bad idea for Continental and some of the other majors carrying high debt. Since cash flows will be weak for some time to come, airline debt will need to be restructured, and absent extraordinary Congressional action, this seems like the easiest route.
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Old Sep 18, 01, 10:24 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">I wonder if Gordon Bethune will take a pay cut???
He was the highest paid airline CEO last year.
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Why shouldn't he be highly paid? He brought CO back from bankrupcy in the mid-90's, and recently, has been able to maintain a profit, when all other airlines except Southwest have been losing money (in many cases, a great deal of money).

In this recent crisis, he's taken a leadership position in the industry in dealing with the press and the government. Considering that, unlike many of the other airline CEOs, he knows how to run an airline profitably in good times and bad, he's probably one of the best people to be doing this. Considering all of this, I think he's earning his keep.
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Old Sep 18, 01, 10:33 am
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Bethune was the highest paid airline CEO??? I could have sworn that it was the Wolf...
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Old Sep 18, 01, 11:07 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Steve M:
Why shouldn't he be highly paid? He brought CO back from bankrupcy in the mid-90's, and recently, has been able to maintain a profit, when all other airlines except Southwest have been losing money (in many cases, a great deal of money).

In this recent crisis, he's taken a leadership position in the industry in dealing with the press and the government. Considering that, unlike many of the other airline CEOs, he knows how to run an airline profitably in good times and bad, he's probably one of the best people to be doing this. Considering all of this, I think he's earning his keep.
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Here, Here, Steve M.
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Old Sep 19, 01, 8:40 am
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Gordon is doing a good job--but if he is begging money from the government--your money and my money, then maybe he SHOULD take a pay cut. And as far as being an industry leader, he should lead by being the first to "give back" several million and keep a few of the employees he's going to furlough.

Also, I have a problem with the airline industry getting "bailed out". The oil industry wasn't bailed out in '83 and what about the dot.coms--it is a fact of a free market society that companies will come and go. Now, having said that, I DO support either low interest loans or some sort of tax relief on a short term basis. If the airlines are bailed out in this time or crisis, are they going to "refund" the bailout if times get good in the future--I certainly doubt it. However, if the "bailout" is a loan, then they should be required to pay back the government (and subsequently, you and me) in the future.

BTW, flew out of IAH to MOB yesterday--the security at IAH had many more policeman and marshalls in front of the terminals, plus several walking around inside. The e-machine was working fine but a Continental employee did check my ID--security at the metal detectors also checked my ticket and ID. The lady screening took a lot longer looking at each bag.

At MOB, there were only a couple of policemen present, check-in was no problem. However, after going through the metal detectors, I (and all other pax) were scanned with the wand, plus patted down. My carryon was hand-searched as well. All in all, while it took a minute longer, it was not a problem.
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Old Sep 19, 01, 9:00 am
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I'm certainly no expert, but I would think in a Ch 11 situation, we as One Pass members would be 'unsecured creditors' and the 'liability' to provide us with free flights could be extinguished as part of the bankruptcy refinance and plan of reorganization. I don't know what happened in CO last CH 11--does anyone??
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Old Sep 19, 01, 12:13 pm
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I've been a OnePass member since 1990, and I've never lost a mile from my OnePass account, even though I didn't fly a single CO flight between July 1996 and January 2000.

I sure wish I could say that about UA and AA, both of whom expired miles back then!
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Old Sep 19, 01, 1:51 pm
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In my opinion, I doubt that Continental would do that, as it would send a negative message to those most important to future revenue - those that have been loyal to Continental. I have many-a-time chosen Continental over another carrier just for miles and loyalty... even if it included inconvenient connections or such. Not taking a violent stand on this issue, but if I had to start again at zero, I would simply re-evaluate which airline would be best for me to continue to do business with. Just my two cents (or 47 pesos)
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