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Union sources claimed that they had already offered deep concessions to Continental. Pilots, they said, had agreed to give up $60 million in wages, flight attendants $40 million. Said Pilot Paul Eckel: "Sure we have an inflated wage structure, but there's a right way and a wrong way to correct that."
Lorenzo defended his strategy, saying that the airline's union contracts were "vestiges of another era." He added that the bankruptcy maneuver would create for Continental the "opportunity to compete in a very challenging and potentially rewarding marketplace." Lorenzo called the airline the "New Continental" and said it aimed to be the biggest discounter in the air. One company insider said the motive was solely survival: "We didn't want it to bleed to death like Braniff," referring to that carrier's slide into bankruptcy in May 1982.
Stunned, angered and confused at first by Continental's unexpected shutdown, passengers by last week soon lined up ten deep at its ticket counters to grab "introductory" fares of $49 to fly anywhere nonstop on the airline's domestic system. At Terminal C of Houston's Intercontinental Airport, Bonnie Hash, 22, stood at the end of a line of 53 people, waiting to swap the return portion of a $425 round-trip ticket to Seattle for a $49 one. "It's inconvenient," said she, "but it's worth the wait." It is still not sure, though, that the flying public will stick with an airline surrounded by so much uncertainty.
Frontier Airlines, which also has financial troubles, reluctantly lowered its fares to match Continental's on competing routes. Said one Frontier official: "We simply cannot let Continental take business away from us at ridiculously low fares." United Airlines and American, however, did not follow suit.
Continental's pilots hit back late last week by striking the carrier. The pilots' strike could stop the New Continental from staying airborne, but there were signs that the airline might have enough pilots to keep flying despite the walkout. A Continental spokesman said only 350 pilots were needed to keep the down-scaled airline going. Declared Lorenzo after the pilots said they would strike: "Continental has more than enough pilots and flight attendants to sustain its operating level and increased service." He said that starting this week the airline actually would increase its domestic flights 20% by adding ten extra flights in eight major markets, restoring its schedule to what it was before the bankruptcy petition. In Continental's opinion, said an official, Bruce Hicks, pilots do not even have the legal right to strike because pre-strike provisions of the Railway Labor Act, which governs unionized airline employees, have not been exhausted.
Pilots for other carriers were so angry at the Continental bankruptcy and other effects of deregulation that they were threatening to stage a short, symbolic nationwide work stoppage. Said an official of the 40,000-member Air Line Pilots Association: "Deregulation is ripping the guts out of this industry, and no one would like to focus on that. But someone is going to have to."