Ex737Driver
Contract 2020????
- Joined
- Aug 14, 2004
- Posts
- 1,240
Continental Airlines Announces First Quarter Net Loss; Reports Operating Profit on Strong Revenue Growth
Thursday April 20, 6:20 am ET
HOUSTON, April 20 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today reported a first quarter 2006 net loss of $66 million ($0.76 diluted loss per share), including a net loss from special items of $20 million. Excluding special items, Continental recorded a net loss of $46 million ($0.53 diluted loss per share) for the quarter.
Significant revenue improvements and savings from wage and benefit reductions and other cost reduction measures resulted in a first quarter operating profit, Continental's first operating profit for a first quarter since 2001. Operating income in the first quarter of 2006 was $11 million, despite a 31-percent increase in fuel prices in the first quarter compared to the same period last year. The company had an operating loss of $173 million in the first quarter of 2005.
During the quarter, Continental's flight attendants ratified a new collective bargaining agreement. That agreement, when combined with previously announced pay and benefit reductions of other work groups, will achieve substantially all of the $500 million in run-rate cost savings benefits that the company targeted.
"Thanks to the continued sacrifices and hard work of my co-workers, we were able to post an operating profit for the quarter," said Larry Kellner, chairman and chief executive officer of Continental Airlines. "Our plan is working because we have the right people, the right fleet and the right facilities to deliver an industry leading product."
First Quarter Revenue and Capacity
Passenger revenue for the quarter increased 18.4 percent over the same period in 2005, to $2.7 billion, with double digit revenue growth in each mainline geographic region and in regional jet operations. Additional capacity and traffic, both domestic and international, and several fare increases produced significantly higher revenue for the company. Consolidated passenger revenue per available seat mile (RASM) for the quarter increased 6.9 percent year-over-year due to increased yields and record high load factors, despite Easter occurring in April this year versus March last year.
Consolidated revenue passenger miles (RPMs) for the quarter increased 12.3 percent year-over-year on a capacity increase of 10.7 percent, resulting in a record consolidated load factor for the quarter of 77.9 percent, 1.1 points above the same period in 2005. Consolidated yield increased 5.4 percent year- over-year, as the company continued to benefit from fuel-driven fare increases.
Mainline RPMs in the first quarter of 2006 increased 11.5 percent over the first quarter 2005, on a capacity increase of 10.5 percent. Mainline load factor was up 0.7 points year-over-year to 78.2 percent. Continental's mainline yields during the quarter increased 4.1 percent over the same period in 2005.
During the quarter, Continental continued to achieve domestic length-of- haul adjusted yield and RASM premiums to the industry. Passenger revenue for the first quarter 2006 and period to period comparisons of related statistics by geographic region for the company's mainline and regional operations are as follows:
Percentage Increase (Decrease) in First Quarter 2006 vs. Passenger First Quarter 2005 Revenue Passenger (in millions) Revenue RASM ASMs Domestic $1,253 14.1% 8.1% 5.6% Transatlantic 390 25.6% 2.4% 22.6% Latin America 326 13.3% 3.2% 9.8% Pacific 204 16.0% (0.2)% 16.2% Total Mainline $ 2,173 16.1% 5.0% 10.5% Regional $510 29.5% 15.1% 12.5% Consolidated $ 2,683 18.4% 6.9% 10.7% Operational Accomplishments
For the third year in a row, Continental was rated the top airline on FORTUNE magazine's Most Admired Global Companies list. In addition, the company was named the most admired airline on the magazine's annual America's Most Admired airline industry list.
"Our industry leading product continues to deliver strong revenue growth for us," said Jeff Smisek, Continental's president. "Our customers clearly prefer us over the competition."
Continental's employees continued to work together to overcome operational challenges caused by record load factors and high winds at its New York area hub. The company recorded a U.S. Department of Transportation on-time arrival rate of 73.3 percent and a systemwide mainline completion factor of 99.3 percent during the quarter. Continental operated 24 days without a single mainline cancellation in the quarter.
Sales at continental.com continued to be strong in the first quarter, up 58 percent over the first quarter 2005. The company anticipates that it will achieve over $3 billion of sales on continental.com this year.
First Quarter Financial Results
Continental's mainline cost per available seat mile (CASM) decreased 2.1 percent in the first quarter compared to the same period last year, primarily due to wage and benefit reductions. CASM decreased 6.5 percent excluding special items and holding fuel rate constant.
"While we will continue to work every cost line item, with the recent ratification of the flight attendant agreement, our $1.6 billion cost reduction effort is largely in place," said Jeff Misner, executive vice president and chief financial officer. "The best part is that we have accomplished it without destroying our product or culture."
Mainline fuel costs for the quarter increased $191 million over the first quarter of 2005, primarily due to a 31-percent increase in fuel prices compared to the same period last year. During the quarter, the price of West Texas Intermediate crude oil closed at a peak of $68.35 per barrel on Jan. 20 and 30, 2006, with Gulf Coast jet fuel closing at a high of $82.77 per barrel on March 30, 2006.
Continental continued to improve the fuel efficiency of its fleet, completing the installation of winglets on 125 aircraft to date. Winglets produce up to a 5-percent reduction in fuel burn and provide additional range. The company expects to be over 24 percent more fuel efficient per available seat mile this year than it was in 1998, in part due to its young fleet and continued investment in fuel saving technology.
During the quarter, Continental recorded net special items of $20 million, consisting of a $26 million charge for the cumulative effect of an accounting change related to the liability for fair value of restricted stock units under FAS123®, a $14 million credit associated with all officers surrendering their restricted stock units that otherwise would have paid out in the quarter, a $15 million settlement charge related to lump-sum pension payments to retiring pilots and a $7 million net expense reversal related primarily to negotiated settlements on three leased MD-80 grounded aircraft. Continental ended the first quarter with over $2.0 billion in unrestricted cash and short-term investments. Cash receipts from advance ticket sales during the quarter were sufficiently strong to enable the company to pre-pay $96 million of high interest rate debt and pre-fund $103 million of aircraft deposits. Both payments will result in interest savings for the company.
Thursday April 20, 6:20 am ET
HOUSTON, April 20 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today reported a first quarter 2006 net loss of $66 million ($0.76 diluted loss per share), including a net loss from special items of $20 million. Excluding special items, Continental recorded a net loss of $46 million ($0.53 diluted loss per share) for the quarter.
Significant revenue improvements and savings from wage and benefit reductions and other cost reduction measures resulted in a first quarter operating profit, Continental's first operating profit for a first quarter since 2001. Operating income in the first quarter of 2006 was $11 million, despite a 31-percent increase in fuel prices in the first quarter compared to the same period last year. The company had an operating loss of $173 million in the first quarter of 2005.
During the quarter, Continental's flight attendants ratified a new collective bargaining agreement. That agreement, when combined with previously announced pay and benefit reductions of other work groups, will achieve substantially all of the $500 million in run-rate cost savings benefits that the company targeted.
"Thanks to the continued sacrifices and hard work of my co-workers, we were able to post an operating profit for the quarter," said Larry Kellner, chairman and chief executive officer of Continental Airlines. "Our plan is working because we have the right people, the right fleet and the right facilities to deliver an industry leading product."
First Quarter Revenue and Capacity
Passenger revenue for the quarter increased 18.4 percent over the same period in 2005, to $2.7 billion, with double digit revenue growth in each mainline geographic region and in regional jet operations. Additional capacity and traffic, both domestic and international, and several fare increases produced significantly higher revenue for the company. Consolidated passenger revenue per available seat mile (RASM) for the quarter increased 6.9 percent year-over-year due to increased yields and record high load factors, despite Easter occurring in April this year versus March last year.
Consolidated revenue passenger miles (RPMs) for the quarter increased 12.3 percent year-over-year on a capacity increase of 10.7 percent, resulting in a record consolidated load factor for the quarter of 77.9 percent, 1.1 points above the same period in 2005. Consolidated yield increased 5.4 percent year- over-year, as the company continued to benefit from fuel-driven fare increases.
Mainline RPMs in the first quarter of 2006 increased 11.5 percent over the first quarter 2005, on a capacity increase of 10.5 percent. Mainline load factor was up 0.7 points year-over-year to 78.2 percent. Continental's mainline yields during the quarter increased 4.1 percent over the same period in 2005.
During the quarter, Continental continued to achieve domestic length-of- haul adjusted yield and RASM premiums to the industry. Passenger revenue for the first quarter 2006 and period to period comparisons of related statistics by geographic region for the company's mainline and regional operations are as follows:
Percentage Increase (Decrease) in First Quarter 2006 vs. Passenger First Quarter 2005 Revenue Passenger (in millions) Revenue RASM ASMs Domestic $1,253 14.1% 8.1% 5.6% Transatlantic 390 25.6% 2.4% 22.6% Latin America 326 13.3% 3.2% 9.8% Pacific 204 16.0% (0.2)% 16.2% Total Mainline $ 2,173 16.1% 5.0% 10.5% Regional $510 29.5% 15.1% 12.5% Consolidated $ 2,683 18.4% 6.9% 10.7% Operational Accomplishments
For the third year in a row, Continental was rated the top airline on FORTUNE magazine's Most Admired Global Companies list. In addition, the company was named the most admired airline on the magazine's annual America's Most Admired airline industry list.
"Our industry leading product continues to deliver strong revenue growth for us," said Jeff Smisek, Continental's president. "Our customers clearly prefer us over the competition."
Continental's employees continued to work together to overcome operational challenges caused by record load factors and high winds at its New York area hub. The company recorded a U.S. Department of Transportation on-time arrival rate of 73.3 percent and a systemwide mainline completion factor of 99.3 percent during the quarter. Continental operated 24 days without a single mainline cancellation in the quarter.
Sales at continental.com continued to be strong in the first quarter, up 58 percent over the first quarter 2005. The company anticipates that it will achieve over $3 billion of sales on continental.com this year.
First Quarter Financial Results
Continental's mainline cost per available seat mile (CASM) decreased 2.1 percent in the first quarter compared to the same period last year, primarily due to wage and benefit reductions. CASM decreased 6.5 percent excluding special items and holding fuel rate constant.
"While we will continue to work every cost line item, with the recent ratification of the flight attendant agreement, our $1.6 billion cost reduction effort is largely in place," said Jeff Misner, executive vice president and chief financial officer. "The best part is that we have accomplished it without destroying our product or culture."
Mainline fuel costs for the quarter increased $191 million over the first quarter of 2005, primarily due to a 31-percent increase in fuel prices compared to the same period last year. During the quarter, the price of West Texas Intermediate crude oil closed at a peak of $68.35 per barrel on Jan. 20 and 30, 2006, with Gulf Coast jet fuel closing at a high of $82.77 per barrel on March 30, 2006.
Continental continued to improve the fuel efficiency of its fleet, completing the installation of winglets on 125 aircraft to date. Winglets produce up to a 5-percent reduction in fuel burn and provide additional range. The company expects to be over 24 percent more fuel efficient per available seat mile this year than it was in 1998, in part due to its young fleet and continued investment in fuel saving technology.
During the quarter, Continental recorded net special items of $20 million, consisting of a $26 million charge for the cumulative effect of an accounting change related to the liability for fair value of restricted stock units under FAS123®, a $14 million credit associated with all officers surrendering their restricted stock units that otherwise would have paid out in the quarter, a $15 million settlement charge related to lump-sum pension payments to retiring pilots and a $7 million net expense reversal related primarily to negotiated settlements on three leased MD-80 grounded aircraft. Continental ended the first quarter with over $2.0 billion in unrestricted cash and short-term investments. Cash receipts from advance ticket sales during the quarter were sufficiently strong to enable the company to pre-pay $96 million of high interest rate debt and pre-fund $103 million of aircraft deposits. Both payments will result in interest savings for the company.
