Results adversely affected by significant declines in high yield
traffic HOUSTON, April 22 /PRNewswire-FirstCall/ -- Continental
Airlines (NYSE: CAL) today reported a first quarter 2009 net loss
of $136 million ($1.10 diluted loss per share). First quarter
results were adversely affected by significant declines in high
yield traffic as many business travelers curtailed travel or
purchased lower yield economy tickets due to the weakened economy.
Fuel expense declined $527 million (41.8 percent) in the first
quarter 2009 compared to the first quarter 2008. Excluding $4
million of aircraft-related charges, Continental recorded a net
loss of $132 million ($1.07 diluted loss per share). "My co-workers
did a great job of working together to meet continued challenges
during a tough quarter," said Larry Kellner, Continental's chairman
and chief executive officer. "They displayed resilience and
remained focused on running a solid operation." First Quarter
Revenue and Capacity Total revenue for the quarter was $3.0
billion, a decrease of 17.0 percent compared to the same period in
2008. Passenger revenue for the quarter fell 18.8 percent ($606
million) compared to the same period last year due to lower fares
and passenger traffic declines. Consolidated average fares dropped
7.4 percent during the quarter compared to first quarter 2008,
declining 16.3 percent in March 2009 versus March 2008.
Consolidated revenue passenger miles (RPMs) for the first quarter
decreased 11.2 percent year-over-year on a capacity decrease of 7.2
percent, resulting in a first quarter consolidated load factor of
75.2 percent, 3.3 points lower than the first quarter of 2008.
Consolidated yield for the first quarter decreased 8.6 percent
year-over-year. Consolidated passenger revenue per available seat
mile (RASM) for the first quarter decreased 12.5 percent
year-over-year. Mainline RPMs in the first quarter of 2009
decreased 11.2 percent compared to the first quarter of 2008, on a
capacity decrease of 7.6 percent year-over-year. Mainline load
factor was 75.8 percent, down 3.0 points year-over-year.
Continental's mainline yield decreased 7.6 percent in the first
quarter over the same period in 2008. As a result, first quarter
2009 mainline RASM was down 11.2 percent compared to the first
quarter of 2008. Passenger revenue for the first quarter of 2009
and period-to-period comparisons of related statistics by
geographic region for the company's mainline operations and
regional operations are as follows: Percentage Increase (Decrease)
in First Quarter 2009 vs. First Quarter 2008 Passenger
----------------------------------------- Revenue Passenger (in
millions) Revenue RASM ASMs ------------- ------- ---- ----
Domestic $1,070 (21.0)% (10.0)% (12.2)% Trans-Atlantic 475 (21.7)%
(19.3)% (3.0)% Latin America 421 (9.0)% (10.3)% 1.5 % Pacific 232
(9.6)% 0.6 % (10.2)% Total Mainline $2,198 (18.0)% (11.2)% (7.6)%
Regional $419 (22.8)% (19.6)% (4.1)% Consolidated $2,617 (18.8)%
(12.5)% (7.2)% Cargo revenue in the first quarter 2009 decreased
30.3 percent ($37 million) compared to the same period 2008, due to
reduced freight volume and lower pricing. Other revenue increased
15.6 percent ($35 million) due to checked bag fees, partially
offset by changes in how certain costs are accounted for under
Continental's capacity purchase agreement with ExpressJet. First
Quarter Operations and Notable Accomplishments During the quarter,
Continental recorded a U.S. Department of Transportation (DOT)
on-time arrival rate of 76.4 percent and a systemwide mainline
segment completion factor of 99.2 percent and employees earned a
total of $3 million in cash incentives for achieving on-time
performance goals. The DOT tentatively approved the application for
Continental to join the existing antitrust immunized alliance
between United Airlines and eight other Star Alliance member
carriers. This alliance will benefit consumers, ensure global
competition with other antitrust immunized alliances and encourage
the retention and growth of open skies between the U.S. and other
nations. Continental remains a full member of SkyTeam through Oct.
24, 2009, and is focused on providing a customer-friendly
transition to Star. "We are excited to be joining Star Alliance,
which will bring unparalleled benefits to our customers worldwide,
and growth opportunities for Continental and its employees," said
Jeff Smisek, president and chief operating officer. "We look
forward to working with our Star partners, as we create new and
substantial competition with other global alliances." Continental
was again rated the top airline on FORTUNE magazine's annual
airline industry list of World's Most Admired Companies. This is
the sixth consecutive year that Continental has topped that list.
The rankings are determined in a survey of corporate and airline
executives, boards of directors and industry analysts. Companies
are evaluated according to quality of products/services, global
competitiveness, people management, social responsibility,
innovation, use of corporate assets, financial soundness, long-term
investment and quality of management. Continental was the first
U.S. carrier to inaugurate daily nonstop scheduled service between
New York and Shanghai on March 25, linking the world's financial
center and top business and tourism destination with China's center
for finance and trade. With the new service to Shanghai,
Continental is the only airline in the world providing daily
nonstop service between New York and three Chinese cities;
Shanghai, Beijing and Hong Kong. Continental received approval from
the DOT to operate daily year-round nonstop service between its
Houston hub at Bush Intercontinental Airport and Rio de Janeiro,
Brazil and through flight service between New Orleans and Rio de
Janeiro beginning summer 2009, pending final government approvals.
During the quarter, Continental began installing DIRECTV, which
will provide up to 80 channels of live, satellite-based television
programming, movies and TV shows on its aircraft. More than 200 of
Continental's next generation Boeing 737s and 757-300 aircraft will
be equipped with the system by the end of 2010. Continental
contributed $50 million to its defined benefit pension plans during
the first quarter of 2009. On April 9, 2009, the company
contributed an additional $50 million to its defined benefit
pension plans. Continental was the first commercial carrier to
successfully demonstrate the use of sustainable biofuel to power an
aircraft in North America. During the demonstration flight,
Continental's test pilots successfully conducted a number of flight
maneuvers, and the biofuel met all performance requirements as
compared to traditional jet fuel. The biofuel blend included
components derived from algae and jatropha plants, both
sustainable, second-generation sources that do not impact food
crops or water resources or contribute to deforestation. First
Quarter Costs and End of Quarter Cash Due to significantly lower
jet fuel costs, Continental's mainline cost per available seat mile
(CASM) decreased 10.4 percent (10.8 percent excluding special
items) in the first quarter compared to the same period last year.
The mainline price of a gallon of fuel dropped 34.6 percent
year-over-year and mainline fuel consumption fell by 11.2 percent.
Holding fuel rate constant and excluding special items, first
quarter 2009 mainline CASM increased 0.9 percent compared to the
first quarter of 2008. "This strong CASM performance, despite
decreases in capacity, is a tribute to the ongoing focus on
efficiency and cost control by the entire Continental team," said
Zane Rowe, Continental's executive vice president and chief
financial officer. Consolidated fuel price was $1.82 per gallon in
the first quarter 2009, of which $0.35 per gallon was related to
Continental's fuel hedges. Consolidated fuel price was $2.80 per
gallon in the first quarter 2008. Continental ended the first
quarter with $2.65 billion in unrestricted cash, cash equivalents
and short-term investments. Fleet Changes Continue to Improve
Efficiency Continental continued to improve fuel efficiency during
the quarter by adding modern, fuel-efficient aircraft to its fleet
and installing winglets on additional aircraft. During the quarter,
Continental took delivery of four new Boeing 737-900ERs. In
addition, the company removed from service three Boeing 737-300s
and returned to service two Boeing 737-500s that were temporarily
grounded at Dec. 31, 2008. Continental is currently scheduled to
take delivery of nine Boeing 737 aircraft in the remaining nine
months of 2009. The company has also agreed to lease four Boeing
757-300 aircraft from Boeing Capital Corporation that are expected
to be placed into service in the first half of 2010. By the end of
2009, the company expects to remove 27 additional Boeing 737-300
and 737-500 aircraft from service. Continental installed winglets
on nine of the company's 737 aircraft during the quarter, and now
has winglets on over 275 of its mainline aircraft. In February,
Aviation Partners Boeing, a joint venture of Aviation Partners,
Inc. and The Boeing Company, completed the world's first blended
757-300 winglet installation on one of Continental's aircraft.
Continental plans to begin installing winglets on all 757-300s
later this year. All of the company's 737-500s, 700s, 800s, 900s
and 757-200s have winglets, as do select aircraft from
Continental's 737-300 series fleets. Winglets increase aerodynamic
efficiency and decrease drag, reducing fuel consumption and
emissions by up to five percent. Corporate Background Continental
Airlines is the world's fifth largest airline. Continental,
together with Continental Express and Continental Connection, has
more than 2,750 daily departures throughout the Americas, Europe
and Asia, serving 133 domestic and 132 international destinations.
More than 750 additional points are served via current alliance
partners. With more than 43,000 employees, Continental has hubs
serving New York, Houston, Cleveland and Guam, and together with
its regional partners, carries approximately 67 million passengers
per year. For more company information, go to continental.com.
Continental Airlines will conduct a regular quarterly telephone
briefing today to discuss these results and the company's financial
and operating outlook with the financial community and news media
at 9:30 a.m. CT/10:30 a.m. ET. To listen to a live broadcast of
this briefing, go to continental.com/About Continental/Investor
Relations. This press release contains forward-looking statements
that are not limited to historical facts, but reflect the company's
current beliefs, expectations or intentions regarding future
events. All forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. For examples of such
risks and uncertainties, please see the risk factors set forth in
the company's 2008 Form 10-K and its other securities filings,
including any amendments thereto, which identify important matters
such as the significant volatility in the cost of aircraft fuel,
the company's transition to a new global alliance, the consequences
of its high leverage and other significant capital commitments, its
high labor and pension costs, delays in scheduled aircraft
deliveries, service interruptions at one of its hub airports,
disruptions to the operations of its regional operators,
disruptions in its computer systems, and industry conditions,
including the recession in the U.S. and global economies, the
airline pricing environment, industry capacity decisions, industry
consolidation, terrorist attacks, regulatory matters, excessive
taxation, the availability and cost of insurance, public health
threats and the seasonal nature of the airline business. The
company undertakes no obligation to publicly update or revise any
forward-looking statements to reflect events or circumstances that
may arise after the date of this press release, except as required
by applicable law. -tables attached- CONTINENTAL AIRLINES, INC. AND
SUBSIDIARIES FINANCIAL SUMMARY (In millions, except per share data)
(Unaudited) Three Months Ended % March 31, Increase/ 2009 2008
(Decrease) ---- ---- ---------- Adjusted Operating Revenue:
Passenger (excluding fees and taxes of $346 and $376) $2,617 $3,223
(18.8)% Cargo 85 122 (30.3)% Other 260 225 15.6 % --- --- 2,962
3,570 (17.0)% ----- ----- Operating Expenses: Wages, salaries and
related costs 765 729 4.9 % Aircraft fuel and related taxes ( A )
735 1,262 (41.8)% Aircraft rentals 237 247 (4.0)% Regional capacity
purchase, net ( A ) 213 292 (27.1)% Landing fees and other rentals
209 207 1.0 % Distribution costs 156 182 (14.3)% Maintenance,
material and repairs 153 159 (3.8)% Depreciation and amortization
111 106 4.7 % Passenger services 88 96 (8.3)% Special charges
(credits) ( B ) 4 (8) NM Other 346 364 (4.9)% --- --- 3,017 3,636
(17.0)% ----- ----- Operating Loss (55) (66) (16.7)% ---- ----
Nonoperating Income (Expense): Interest expense ( C ) (93) (93) -
Interest capitalized 8 9 (11.1)% Interest income 4 24 (83.3)%
Other, net - (1) (100.0)% --- --- (81) (61) 32.8 % ---- ---- Loss
before Income Taxes (136) (127) 7.1 % Income Tax Benefit - 45
(100.0)% -- -- Net Loss $(136) $(82) 65.9 % ====== ===== Basic and
Diluted Loss per Share $(1.10) $(0.82) 34.1 % ======= =======
Shares Used for Basic and Diluted Computation 123 98 25.5 % ( A
)Expense related to fuel and related taxes on flights operated for
us by other operators under capacity purchase agreements is now
included in aircraft fuel and related taxes, whereas it was
previously reported in regional capacity purchase, net.
Reclassifications have been made in these financial statements to
conform to our current presentation. These reclassifications do not
affect operating loss or net loss for any period. ( B )Special
charges (credits) includes a $4 million charge for future lease
costs on permanently grounded Boeing 737-300 aircraft and a credit
of $8 million related to the sales of three Boeing 737-500 aircraft
in the three months ended March 31, 2009 and 2008, respectively. (
C )Effective January 1, 2009, we adopted Financial Accounting
Standards Board's Staff Position No. APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)," which clarifies
the accounting for convertible debt instruments that may be settled
in cash (including partial cash settlement) upon conversion. The
financial statements for the three months ended March 31, 2008 have
been adjusted to reflect our adoption of this standard. CONTINENTAL
AIRLINES, INC. AND SUBSIDIARIES STATISTICS Three Months Ended %
March 31, Increase/ 2009 2008 (Decrease) ---- ---- ----------
Mainline Operations: Passengers (thousands) 10,562 12,197 (13.4)%
Revenue passenger miles (millions) 17,690 19,923 (11.2)% Available
seat miles (millions) 23,352 25,278 (7.6)% Cargo ton miles
(millions) 200 261 (23.4)% Passenger load factor: Mainline 75.8%
78.8% (3.0) pts. Domestic 79.7% 81.9% (2.2) pts. International
72.1% 75.6% (3.5) pts. Passenger revenue per available seat mile
(cents) 9.41 10.60 (11.2)% Total revenue per available seat mile
(cents) 10.83 11.93 (9.2)% Average yield per revenue passenger mile
(cents) 12.43 13.45 (7.6)% Average fare per revenue passenger
$209.94 $221.87 (5.4)% Cost per available seat mile (CASM) (cents)
( A ) 10.56 11.79 (10.4)% Special charges (credits) per available
seat mile (cents) 0.02 (0.03) NM CASM, holding fuel rate constant
(cents) ( A ) 11.94 11.79 1.3 % Average price per gallon of fuel,
including fuel taxes $1.83 $2.80 (34.6)% Fuel gallons consumed
(millions) 333 375 (11.2)% Actual aircraft in fleet at end of
period ( B ) 354 372 (4.8)% Average length of aircraft flight
(miles) 1,502 1,457 3.1 % Average daily utilization of each
aircraft (hours) 10:22 11:11 (7.4)% Regional Operations: Passengers
(thousands) 3,846 4,243 (9.4)% Revenue passenger miles (millions)
2,100 2,357 (10.9)% Available seat miles (millions) 2,971 3,098
(4.1)% Passenger load factor 70.7% 76.1% (5.4) pts. Passenger
revenue per available seat mile (cents) 14.11 17.54 (19.6)% Average
yield per revenue passenger mile (cents) 19.96 23.05 (13.4)% Actual
aircraft in fleet at end of period ( C ) 280 269 4.1 % Consolidated
Operations (Mainline and Regional): Passengers (thousands) 14,408
16,440 (12.4)% Revenue passenger miles (millions) 19,790 22,280
(11.2)% Available seat miles (millions) 26,323 28,376 (7.2)%
Passenger load factor 75.2% 78.5% (3.3) pts. Passenger revenue per
available seat mile (cents) 9.94 11.36 (12.5)% Average yield per
revenue passenger mile (cents) 13.23 14.47 (8.6)% Average price per
gallon of fuel, including fuel taxes $1.82 $2.80 (35.0)% Fuel
gallons consumed (millions) 403 451 (10.6)% ( A )Includes impact of
special charges (credits). ( B )Excludes 11 737-300 and five
737-500 grounded aircraft at March 31, 2009. ( C )Consists of
flights operated under capacity purchase agreements with
Continental's regional carriers ExpressJet, Colgan, Chautauqua and
CommutAir. Excludes 30 EMB-135 aircraft temporarily grounded at
March 31, 2009. CONTINENTAL AIRLINES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES Net Loss (in millions) Three Months
Ended March 31, 2009 -------------- Net loss $(136) Adjust for
special charges (net of tax of $0) 4 --- Net loss, excluding
special charges ( A ) $(132) ====== Loss per Share Three Months
Ended March 31, 2009 -------------- Diluted loss per share $(1.10)
Adjust for special charges 0.03 ---- Diluted loss per share,
excluding special charges ( A ) $(1.07) ======= CASM Mainline
Operations (cents) Three Months Ended % March 31, Increase/ 2009
2008 (Decrease) ---- ---- ---------- Cost per available seat mile
(CASM) $10.56 $11.79 (10.4)% Less: Special (charges) credits (0.02)
0.03 NM ------ ---- CASM, excluding special (charges) credits 10.54
11.82 (10.8)% Less: Current year fuel per cost available seat mile
( B ) (2.61) - NM Add: Current year fuel cost at prior year fuel
price per available seat mile ( B ) 4.00 - NM ---- --- CASM holding
fuel rate constant and excluding special (charges) credits ( A )
$11.93 $11.82 0.9 % ====== ====== ( A )These financial measures
provide management and investors the ability to measure and monitor
Continental's performance on a consistent basis. ( B )Both the cost
and availability of fuel are subject to many economic and political
factors and are therefore beyond the company's control. DATASOURCE:
Continental Airlines CONTACT: Corporate Communications of
Continental Airlines, +1-713-324-5080, Web Site:
http://www.continental.com/ http://www.continental.com/company/news
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