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News Release

Release #03.CAL
December 4, 2003

Arbitration Board Points Continental to 'Interest Arbitration' Over B-757-300

HOUSTON—An Arbitration Board has decided that Continental Airlines, under the terms of its pilot contract, must consider the Boeing 757-300 as a new aircraft type and engage in “interest arbitration” to properly categorize the aircraft for pay purposes.

Unlike most other major U.S. carriers, Continental (CAL) pay rates are determined using a three-tier “category” system (i.e., Small, Large and Wide Body aircraft) instead of the more traditional “differential” system where rates are determined by aircraft model and type.

The award, handed down by the three-man Board in November, agreed with the pilots that pay for the B-757-300 aircraft is not addressed in the current contract.

“We have been fighting to resolve this issue for three years,” said Capt. Jay Panarello, Chairman of the CAL pilots union’s Master Executive Council, a unit of the Air Line Pilots Association (ALPA).

The dispute arose soon after CAL announced intentions to order 15 Boeing 757-300 aircraft in late 2000, three years after the current pilot contract was signed. When the B-757-300 was placed in service, pay for the new fleet was calculated at the same rate as the B-757-200.

“Our contract clearly outlines that pay rates for aircraft not referenced in our pay provisions are to be determined by interest arbitration,” said Panarello.

Nonetheless, Continental claimed that interest arbitration provisions should not be used in determining pay rates for the B-757-300 aircraft. The three-man Arbitration Board disagreed, saying that the B-757-300 “… is different from the 757-200” and “… needs to be categorized.… pursuant of the Interest Arbitration provisions” in the CAL pilots’ contract.

“We look forward to proceeding with the interest arbitration,” said Panarello. “We firmly believe that the B-757-300 belongs in the same category as the B-767-200, which carries fewer passengers.”

Continental Airlines currently operates 41 B-757-200 and four B-757-300 aircraft, with five additional B-757-300s scheduled for delivery in 2004.

The Continental MEC represents the almost 6,000 pilots of Continental and Continental Express Airlines. Founded in 1931, ALPA is the world’s largest pilot union representing 66,000 pilots at 42 airlines in the U.S. and Canada. Visit the ALPA Web site at

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ALPA Contact: James H. Moody