Continental recalls some furloughed pilots

NEW YORK (CNNMoney.com) -- Continental Airlines is recalling some of the pilots it furloughed several years ago, as the company ramps up international flights and replaces retiring older pilots.

Continental (CAL, Fortune 500) spokeswoman Julie King said the airline is recalling 15 of the 147 pilots it furloughed in 2008. In addition, it is putting more than 100 pilots back on active status from the voluntary leaves of absence that they took in 2008.

Some of these pilots will be flying the company's two recently acquired Boeing 777s, which will be used for international flights, King said.

Continental furloughed the pilots during a particularly tough year for the airline industry, which has struggled to cope with stagnant business and vacation travel thanks to the recession, as well as volatile fuel prices.

"We are pleased to see our pilots returning," said Capt. Jay Pierce, a Continental pilot and a chairman for the Continental chapter of the Air Line Pilots Association. "With the anticipated delivery of new aircraft, the improvements in the economy and the expectations for increased passenger travel during the upcoming summer vacation season, the return of our furloughed pilots -- all of them -- is needed to maintain the level of service that Continental is known for."

Hunter Keay, senior airline analyst for Stifel Nicolaus & Co., said the recall is a small but positive sign for the airline industry.

"Clearly, the industry is recovering, but I think certain regions are performing better than others, and certain airlines are outperforming others," said Keay. "I think that's a bullish indicator for the demand that Continental sees in its core markets."

The recall is occurring as Continental prepares to merge with UAL Corp.'s United Airlines.

UAL Corp. (UAUA, Fortune 500) announced on May 3 that United will merge with Continental in a deal worth $3.2 billion, creating the world's largest airline.

The combined company, which will fly under the United moniker and Continental logo, will be larger than Delta Air Lines (DAL, Fortune 500), which became the country's largest airline when it merged with Northwest Airlines in 2008.

Helane Becker, airline analyst for Jesup & Lamont Securities Corp., said the airlines pledged that they would not lay off pilots as part of the merger.

She cast Continental's pilot recall as a sign that the airline recognized that its latest staff cuts were "more muscle than fat."