Continental Airlines and union leaders representing 9,500 flight attendants have reached a tentative 20-month interim agreement.
The deal struck on Tuesday is expected to go to a union vote in the coming weeks.
Flight attendants had previously rejected a deal in October. Details of the new contract include a 2.5% base pay increase that will be retroactive to January 1, with another 2.5% increase due next September.
Additional highlights include sick leave enhancements, profit sharing, and a no-furlough clause that will run the length of the agreement.
Union President Joey Guider said the negotiating committee "unanimously recommends membership ratification.”
Continental merged with United Airlines in October, with each carrier continuing flight operations as separate units of the combined company.