Continental’s golden passes…

images5.jpegIf you’re a fan of the TV show Lost, you know that the fictional Oceanic Airlines – operator of the downed flight that landed the cast on a mysterious island in Season 1 – has issued “golden passes” to survivors, allowing them to fly wherever they please for the rest of their lives.

Oceanic looks like a cheapskate next to Continental Airlines (CAL), which filed this letter along with its 10-K on Thursday, modifying its current flight benefits for outside directors. As described in last year’s proxy, these benefits were already quite generous: free travel for each director, and his or her family, for as long as the director is alive. The directors also get a tax reimbursement, plus little extras like admission to the V.I.P. airport lounge, where, as we all know, the coffee is piping hot and the restrooms are spotless.

Apparently that wasn’t good enough for Continental’s directors, because in the letter (dated February 20), the company added “survivor benefits.” This has nothing to do with surviving a plane crash or months on a dangerous island, but rather it means that the directors can now bequeath flight benefits to their spouses and kids. The document is a little confusing, but it seems that for at least 10 years after a director’s death, his or her family will get up to $10K per year in air travel, along with a tax gross-up.

While a director is still alive, the “family members” who are eligible for free flights include a “travel companion,” unmarried children through age 20 (or 25 if they’re students), and two parents (which can include step-parents).

The letter does impose what seems to be a new restriction: directors may not use Continental’s flight benefits for unrelated business travel, and if they do the company can take away their golden passes.