Twotter Driver
Well-known member
- Joined
- May 5, 2003
- Posts
- 104
Continental Likely to Benefit from Guam Military Buildup
By Frank Whitman in New York
Monday: October 29, 2007
Continental Airlines is “extremely focused” on the coming military-spending increase in Guam, though it is too early to know what specific changes are in store for the region, airline officials said during a press conference in New York on Thursday. “We know there are going to be some opportunities there for us to increase service,” said Zane Rowe, Continental senior vice president for its network. “We’re thinking about a variety of ways to do that.”
The airline’s optimism is not surprising since the U.S. military plans to spend about $15 billion on facilities in Guam by 2020, including $10.3 billion to relocate 17,000 Marines and their dependents to the island from Okinawa by 2014. As planned, the buildup will result in an unprecedented construction boom on the island, an estimated 25 percent increase in the island’s population and a likely surge in associated economic activity. Continental Micronesia, the wholly owned subsidiary of Continental based in Guam, and Northwest Airlines are the only U.S. airlines that serve Guam, with Northwest’s service coming only via its Narita hub.
The bulk of the buildup is still in the planning stages and airline executives later expressed a note of caution common among businesses eyeing the project. “It will be helpful to us to get more details from the military,” said Larry Kellner, Continental chairman and chief executive officer. “We want to make sure that we don’t get ahead of the buildup, but that we also are able to provide the right level of service to support that buildup.” As the military business increases, “we try to time our connections both from New York and from Houston to make it easier to get to Guam,” Kellner added.
The officials otherwise expressed satisfaction with the operations of its Micronesia subsidiary. “Our market in Guam has been primarily a leisure market in Japan and the surrounding islands in the Pacific; that core business won’t change,” said Kellner. “We’re very happy with how the market there continues to develop. Our growth in many cases is tied to tourism and hotel rooms and how much demand for travel there is in that market.” The airline’s Continental Micronesia business, “has been a good, solid, consistent and profitable business,” added Jeff Smisek, airline president.
Airline officials were in New York to celebrate the 10th anniversary of the launch of Continental’s Global Gateway project at Newark Liberty International Airport in New Jersey. About 60 non-U.S. journalists participated in the event. The statements came in response to questions about the future of the airline’s Guam hub.
Executives also pointed out the airline’s financial strength in relation to its competition and discussed plans to upgrade its fleet. During the next three years Continental expects to take delivery on 64 new Boeing 737s and eight of the new, technologically innovative Boeing 787 “Dreamliners.” “Over the next couple of years, we’ll spend over a couple of billion dollars just on fleet issues,” said Kellner. While officials declined to specify markets into which the new planes will be deployed, they did say that the 787s, in particular, would permit service to destinations to which the airline currently does not fly. In addition, its already relatively young, more fuel-efficient fleet permits the airline to “fly with 35 percent less fuel per revenue passenger mile than we did just 10 years ago,” said Smisek.
By Frank Whitman in New York
Monday: October 29, 2007
Continental Airlines is “extremely focused” on the coming military-spending increase in Guam, though it is too early to know what specific changes are in store for the region, airline officials said during a press conference in New York on Thursday. “We know there are going to be some opportunities there for us to increase service,” said Zane Rowe, Continental senior vice president for its network. “We’re thinking about a variety of ways to do that.”
The airline’s optimism is not surprising since the U.S. military plans to spend about $15 billion on facilities in Guam by 2020, including $10.3 billion to relocate 17,000 Marines and their dependents to the island from Okinawa by 2014. As planned, the buildup will result in an unprecedented construction boom on the island, an estimated 25 percent increase in the island’s population and a likely surge in associated economic activity. Continental Micronesia, the wholly owned subsidiary of Continental based in Guam, and Northwest Airlines are the only U.S. airlines that serve Guam, with Northwest’s service coming only via its Narita hub.
The bulk of the buildup is still in the planning stages and airline executives later expressed a note of caution common among businesses eyeing the project. “It will be helpful to us to get more details from the military,” said Larry Kellner, Continental chairman and chief executive officer. “We want to make sure that we don’t get ahead of the buildup, but that we also are able to provide the right level of service to support that buildup.” As the military business increases, “we try to time our connections both from New York and from Houston to make it easier to get to Guam,” Kellner added.
The officials otherwise expressed satisfaction with the operations of its Micronesia subsidiary. “Our market in Guam has been primarily a leisure market in Japan and the surrounding islands in the Pacific; that core business won’t change,” said Kellner. “We’re very happy with how the market there continues to develop. Our growth in many cases is tied to tourism and hotel rooms and how much demand for travel there is in that market.” The airline’s Continental Micronesia business, “has been a good, solid, consistent and profitable business,” added Jeff Smisek, airline president.
Airline officials were in New York to celebrate the 10th anniversary of the launch of Continental’s Global Gateway project at Newark Liberty International Airport in New Jersey. About 60 non-U.S. journalists participated in the event. The statements came in response to questions about the future of the airline’s Guam hub.
Executives also pointed out the airline’s financial strength in relation to its competition and discussed plans to upgrade its fleet. During the next three years Continental expects to take delivery on 64 new Boeing 737s and eight of the new, technologically innovative Boeing 787 “Dreamliners.” “Over the next couple of years, we’ll spend over a couple of billion dollars just on fleet issues,” said Kellner. While officials declined to specify markets into which the new planes will be deployed, they did say that the 787s, in particular, would permit service to destinations to which the airline currently does not fly. In addition, its already relatively young, more fuel-efficient fleet permits the airline to “fly with 35 percent less fuel per revenue passenger mile than we did just 10 years ago,” said Smisek.
