Martin HandMartin Hand Vice President,

Reservations, Customer Care and Sales Resources

Creating a Great Place to Work Creating a Great Place to Work and a Great Place to Calland a Great Place to Call

2

Overview

Continental Profile

It’s All About Quality

Creative Staffing

Rewards & Recognition

Continental ProfileContinental Profile

4

State of the Airline - 1994

10 presidents in 10 yearsLast in all U.S. DOT metrics On-Time Performance, Bags, Customer

Complaints

Highest passenger avoidance ratingEmployees hated usStock was trading at less than $4On the way to 3rd bankruptcy

5

State of the Contact Center - 1994

50%-60% turnoverMandatory over-time for nine monthsAbandoned calls the norm65 evaluation form questionsAbsolutes and micromanagingNo customer voiceNo employee voice1:15 supervisor ratio“Robo-Res”

6

State of the Airline - 2006

$2.4 billion cash balance

Fortune Magazine’s “100 Best Companies to Work For” six consecutive years

Air Transport World’s “Airline of the Year” - 1996 & 2001

Training Magazine’s “Top 100 Training Organizations” 2001-2004

7

State of the Contact Centers - 2006

No mandatory overtime in nine years

13 evaluation form questions

Empowered workforce

Measure and reward the right things

Customer is the boss

Employee voice and inclusion

1:40 Supervisor ratio

8

State of the Contact Centers - 2006

Call Center of the Year 2003 Call Center Magazine

Top 10 CRM Implementations 2002 Aberdeen Group

Innovator of the Year 2003 Witness Systems

Service Elite Award for Quality Monitoring 2004

CRM Magazine

Call Center of Excellence 2004 BenchmarkPortal

9

Create a culturewhere employees

enjoy comingto work.

Larry KellnerLarry KellnerContinental Airlines Continental Airlines Chairman & CEOChairman & CEO

10

Shaping the Vision - The Go Forward PlanThe Go Forward Plan

Improve revenueand deliver a profit

Secure liquidityfor turnaround

Become an airlineof preference

Create environmentof dignity and respect

1995

2006Use our assets

to build for the future

Deliver an industry leading product that

is clean, safe and reliable

Help employees buildCareers they enjoy

every day

Above average returns in a

changed industry environment

Fly to Win

Fund theFuture

Make Reliabilitya Reality

WorkingTogether

11

Run Contact CentersLike A Business

Produce HighlySatisfied Customers

Help Employees BuildCareers They Enjoy

Every Day

Generate Revenue

Fly to Win

Fund theFuture

Make Reliabilitya Reality

WorkingTogether

Contact Centers’ - Go Forward PlanGo Forward Plan

12

Profile of Contact Centers

Three domestic and eight international contact centers

2.5K+ agent workstations

4.0K+ Reservations agents

50M+ calls annually Airline reservations Frequent flyer program Third party customers

13

Salt Lake City, Utah

658 agents

6:00AM - 12:00AM local

Functions General Sales (Domestic) International Sales Elite OnePass Partners Electronic Support Desk

14

Tampa, Florida

900 agents

24 X 7

Functions General Sales (Domestic) International Sales Elite Support Desk (Help) Flight Recovery Center Queues

15

North Houston Center, Houston, Texas

2,000 agents

24 X 7

76 special functions, including: General Sales (Domestic) International Sales Elite Support Desk (Help) Electronic Support Desk Customer Care OnePass Service Center Foreign Language Desk

16

•Mexico City, MX

•Monterrey, MX

•Sao Paulo, Brazil

•Mexico City, MX

•Monterrey, MX

•Sao Paulo, Brazil

•Brussels, Belgium

•Tel Aviv, Israel

•Brussels, Belgium

•Tel Aviv, Israel

•Guam

•Tokyo, Japan

•Hong Kong, China

•Guam

•Tokyo, Japan

•Hong Kong, China

17

Call Volume

Annual call volume 50+M

Average handle time 285 seconds

Average speed of answer 20 seconds

18

Automated Call Functions

Flight information

Continental Pass Line

InfoPass

eBalance

Annual call volume 7.3M

19

Staffing and Forecasting

Agent shift bids: three times per year

Seniority based

80% of staffing requirements are created centrally

97% occupancy

#1 average speed of answer in the airline industry

20

Profile of Contact Centers

Full time 50%

Part time 50%

Average seniority 12.2 years

Annual voluntary turnover (’06) 2.2%

Agents with perfect attendance 47%

21

Continental Philosophy

Hire the right people

Provide the best tools, training, technology and resources for successful employees

Communicate expectations

Measure and hold accountable

Reward and motivate

Provide ongoing coaching and training

Empower employees

Management - get out of the way!

22

Continental Culture

Create an organization where employees enjoycoming to work!

It’s All About QualityIt’s All About Quality

24

Critical Success Factors

Link CSR measurements toGo Forward Plan

Clearly understand contact center vision

Involve stakeholders in every step of the process

Listen to customers - internal and external

25

Key Result Areas

Customer Service

SalesContinental RevenueSales Effectiveness (PSE)Partner Revenue

ProductivityCalls per HourReliabilityAccountability

eCoach Quality Rating / Customer FeedbackAccuracy

26

QA Responsibilities

Quality Specialist Quality monitoring

Supervisor to agent ratio: 1:40 Additional monitoring Mentoring

Managers Quality checks

27

QA Responsibilities

QA Task Force Local consistency System program changes

Headquarters staff System quality checks Reports Overall trends System calibration

28

Quality Monitoring Frequency

New Hires Five calls / one coaching session weekly

Probation and below target CSRs 10 calls per month / two coaching sessions

On-target Five calls per month / one coaching session

Above-target Three calls per month / one coaching session

29

Recording Calls

Witness eQuality Balance captures voice and data

Four ways to capture calls Live monitor Randomizer Scheduler (all calls during block of time) Agent Initiated Monitoring (AIM)

30

Customer Service

Measure what’s important to customers

Key customer drivers

Train, reinforce and expect superior customer service

31

Measure What’s Important to Customers

Newsflash: Customers don’t care if we say, “Thanks for calling Continental.”

So we don’t measure it.

No more “absolutes!”

Results-oriented and big picture strategies. Honor individual styles that achieve positive results

No scripting. Promote best practices and success secrets from top agents

32

Key Customer Drivers

1. Provide accurate information

2. Understand needs

3. Answer promptly

4. Provide friendly and courteous service

5. Provide assistance with finding “The Best Deals”

6. Provide efficient service

7. Be responsive

33

Customer Service (45 points possible)

Provides and documents accurate information

Provides courteous service

Provides Elite members with personalized service

Uses Customer Care guidelines to resolve problems

Satisfies DOT and CustomerFirst Commitments

Customer mishandling

34

Example - Accurate Information

It’s all or nothing; partial information or 99% of the information is not good enough

This “attribute” replaced 16 questions from previous evaluation form

1. Quoted Minimum 2 Flight Schedules

2. Advised Complete Fare Rules

3. Documented Fare Rules

4. Advised Correct Policies & Procedures

5. Documented Correct Ticket-Time-Limit

6. Documented Correct Credit Card #

7. Documented Correct Billing Address

8. Documented Correct Phone Number

9. Recapped Itinerary

10. Assigned Seats

11. Documented Special Service Requests

12. Booked / Rebooked Flights Correctly

13. Advised Correct Travel Documents

14. Documented Travel Documents

15. Documented Citizenship

16. Documented Correct OnePass Number

35

Sales (36 points possible)

Offers ticketing

Offers to create a reservation

Offers alternatives to overcome objections

Promotes continental.com check-in

Offers special promotions Avis/Budget Hotels.com

36

Production (19 points possible)

Researches using available tools and resources before contacting Support (Help Desk)

Identifies customer needs

Demonstrates overall call efficiency

37

Where Are All the Details?

Training New Hire Sellebration Ex$ellence Customer Care CustomerFirst QA

Definitions documentonline

38

Creative StaffingCreative Staffing

40

Staffing Challenges - That Was Then…1994

Attrition spiraling upward due to: Lack of flexibility Poor schedules New job & better pay Benefits Lack of career path / development opportunities

Call centers located in cities with abundance of call centers

41

Hiring approval was generally received far too late to beat the requirement curve Continually hiring and training Inexperienced workforce loss of revenue

Lost time due to “illness” much greater than planned

Staffing Challenges - That Was Then…1994

42

Staffing in the Old Days

43

Staffing in the Old Days

Constant battle to manage peaks

Frequent and often mandatory overtime

Mostly full-timers

Little or no authorized unpaid time off (AUTO)

Little or no recurrent training

44

New Approach to Staffing

1996 - Total paradigm shift

Changed approach to staffing Managed down, not up Reduced overtime Increased part-time employees Introduced creative staffing Maximized AUTO

45

Staff to Peak Approach

46

Advanced AUTO

Long-range staffing forecast indicates surplus

Awarded by function, end time and seniority

Provides agents more flexibility for vacation time and other time off

47

Daily AUTO

Pre and post arrival

Based on real-time operational needs

Overstaffed / volume under forecast

48

Results and Benefits - This is Now!

Recruiting costs

Trickle hiring vs. mass hiring

Almost eliminated advertising costs

Freed up management

More flexibility and time to deal with real-time operational and people issues

Reduced premium overtime expenses

More experienced employees = sales

49

But Wait, There’s More

Reduced attrition Less than 5% annually

Reduced lost time due to illness

Satisfied, happy employees Fortune’s 100 Best Companies to Work For 6 consecutive

years

Opened up the opportunity to have our “cost center” produce new incremental revenue and more flexibility programs

50

Incremental Revenue Opportunities

3rd party call handling

Management consulting services

Training development and delivery

Contact center conferences and workshops

Ex$ellence

51

Creative Staffing Conclusions

Flexibility to the operation

Flexibility to employees

Opportunities for employee programs TOPs 3rd party assignments Director days off Trade a day with management AUTO

Rewards and RecognitionRewards and Recognition

53

Perfect Attendance Program

We measure and reward employee’s reliability.

Every company has an attendance program…but how about a Ford Explorer just for coming to work?

54

Perfect Attendance Program

For every six months of perfect attendance - name goes into a drawing.

Ford Explorer drawing once a year (eight winners; one winner from all call centers combined.)

Larry personally calls winners.

Big celebration.

55

Perfect Attendance Program

129 Ford Explorers awarded since 1996.

50% of employees had perfect attendance in 2005.

56

Super Agent Program

Recognize overall above target performance: Sales (Revenue and PSE) Customer Service (Quality scores) Productivity (Calls per hour) Reliability (Attendance points)

Agent must be above/on target in all areas for previous three months No below target ratings

Re-qualify each month

57

Super Agent Perks

Unlimited 15 minute shift flexes

One day of AUTO per bid

Trade-a-day with management

Additional empowerment and training

Special projects

58

Incentive Programs

Recognize and reward sales performance

Continental sales incentive program Incentive dollars for ticketed reservations Bonus for top performers Paid monthly

Partner sales incentive program Money for transfer to car and hotel partners Fun perks and special promotions offered periodically Paid monthly

59

On-Time Bonus Program

Recognize and reward on-time performance and teamwork

Introduced in 1995 -- $65 for every employee* when Continental ranked in the top five for on-time by DOT

Raised the bar over the years

Current program: $100 to every employee* when Continental ranks #1 -or- $100 to every employee* if Continental achieves minimum 80%

average for entire quarter

*manager and below

60

Talent Optimization Program (TOPs)

Must be a Super Agent

Program highlights Temporary projects and assignments offered from other divisions

throughout the company Hire Super Agents vs. outside temps Assignments: 30 days – six months

Program benefits Learning and development opportunity for employees Exposure to other areas of the company Variety of work Potential promotional opportunities

61

Communication

Videos Continental Quarterly

Employee meetings

62

Success Secrets

Communication Benefits Consequences How to win

Buy-in -- inclusion vs. exclusion

Win-win strategy

Measure performance

Track results

Reward positive behaviors and results

Celebrate success

63

Results

Sales Reservations revenue increased 14% to 19% (2000-2006) Increased ticket sales YOY 24% increase YOY in car transfers

Quality Assurance Results* 50% increase YOY in calls evaluated 100% increase YOY in coaching time

Productivity 1:40 Supervisor to agent ratio

*Based on Initial Results 2000 vs. 1999

64

Results

Customer Service Reduced calls to Support (6% in 2001)

• 4.8% in 2002• 3.8% in 2003/04/05/06

No DOT or CustomerFirst fines

Employee satisfaction Less than 5% annual turnover It’s a great place to work Outstanding employee feedback

65

It’s Worth It!

Martin HandMartin Hand Vice President,

Reservations, Customer Care and Sales Resources

Creating a Great Place to Work Creating a Great Place to Work and a Great Place to Calland a Great Place to Call

Thank you