updated 12/7/2005 1:32:07 PM ET 2005-12-07T18:32:07

Continental Airlines and its flight attendants resumed contract talks Wednesday, but hurdles to an agreement remain, including proposed cuts in wages and benefits.

Last June the nation's fifth-largest carrier asked the National Mediation Board to appoint a mediator to help with talks, which have continued on and off since flight attendants in March rejected an $82 million cut. So far those efforts haven't produced an agreement.

Other sticking points include pension security and crew rest.

Continental reached pay and benefit cut agreements in March with its largest unions except the airline's 9,000 flight attendants. The deals approved by pilots, mechanics and other unions, along with $169 million in previously disclosed wage and benefit cuts affecting nonunion employees, reached about $418 million of the carrier's goal to cut costs by $500 million to combat continued losses and soaring jet fuel prices.

Continental said earlier this year the airline expected significant losses in 2005, but projected cash flows and reserves would be enough for the year if unions approved the cuts. The carrier lost $184 million in the first quarter, but posted profits of $100 million and $61 million in the second and third quarters, respectively.

The International Association of Machinists and Aerospace Workers, which represents Continental's flight attendants, said in a letter this week that an agreement will be reached when Continental meets its demands, including secure retirement enhancements, preserved wages and improved commuter issues.

If no deal is reached, the union's policy is to present members with the carrier's final offer to consider alongside a strike vote.

Continental officials said flight attendants could vote in January if a pact is reached this week. If not, a strike could occur.

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