CAL 4th Quarter Profit / Capacity Increase

[Furloughed80]

By David Koenig, AP Airlines Writer , On Thursday January 21, 2010, 7:42 am EST
DALLAS (AP) -- Continental Airlines Inc. earned a surprising profit in the fourth quarter thanks to higher traffic and lower fuel spending.

Continental said Thursday that it earned $85 million in the quarter.

Without some special items, including an income tax gain, the company would have earned $4 million, or 3 cents per share. Analysts expected a loss of 7 cents per share.

The biggest difference from a year ago was spending on fuel, which plunged by about one-third, as prices were much lower than they were in late 2008. The airline spent $388 million less on fuel than it did a year earlier.

Houston-based Continental, the nation's fourth-largest airline, boosted passenger traffic by 3.5 percent in the quarter including its commuter airline affiliates.

But revenue fell 8.3 percent, to $3.18 billion, because of a decline in high-paying customers, who were sidelined by the recession.

Passenger revenue per available seat mile, a closely watched indicator for airlines, fell 9 percent. Still, that was much better than the 17.9 percent and 17.7 percent declines of the previous two quarters, and a sign that deep discounting of fares may be slowing.

Chairman and CEO Jeff Smisek said some business traffic is increasing, but "we likely have a long and slow road to recovery."

Big U.S. airlines have been hit hard by the recession, which led to a slump in traffic in the U.S. and on trans-Atlantic routes. Continental's surprising profit comes a day after American Airlines said international bookings were running ahead of last year's pace and high-paying customers may be returning, raising hopes for a recovery in travel.

Continental and other airlines have also been helped by fees for checking baggage and other services, which made up for some of the decline in ticket revenue. This month, Continental raised its checked-bag fees.

The fourth-quarter profit provided an upbeat ending to Continental's second straight money-losing year.

For all of 2009, Continental lost $282 million, or $2.18 per share, as revenue plunged 17.4 percent, to $12.59 billion.

The company includes Continental Express and Continental Connection commuter airlines.

There was little premarket activity in Continental shares, which closed 19 cents higher Wednesday at $20.62.

NEW YORK (MarketWatch) -- Continental Airlines Inc. (CAL 20.18, -0.44, -2.13%) said Thursday its 2010 consolidated capacity is expected to grow 1% to 2% from 2009, with mainline capacity up 1.5% to 2.5%. International mainline capacity in 2010 is projected to climb 4% to 5%, while domestic capacity is expected to be flat versus 2009. For the next six weeks, transatlantic bookings are up 10 to 11 points and transpacific bookings are up 2 to 3 points, but domestic bookings are down 1 to 2 points. Regional bookings are also lower by 1 to 2 points. For the first quarter, Continental expects its planes will be fuller, with load factors up about 3 points.

Additionally, CAL will take delivery of 14 aircraft this year. With retirements, it should result in a net gain of 10 aircraft. Manpower planning says we could see recalls this Fall. Let's hope that's true. This summer staffing will be tight.

 

[Superpilot92]

good news!!

 

[GFunk20]

Good job....and I guess Smisek is a quarter closer to getting his $730k salary now...

 

[Ben Franklin]

Good job....and I guess Smisek is a quarter closer to getting his $730k salary now...

In the mean time, he'll just have to settle for $5,000,000+ in bonus money.

Sincerely,

B. Franklin

 

[Quimby]

Hopefully he'll scrape by. Maybe you could start a fund for him or something.

 

[SuperFLUF]

Hopefully he'll scrape by. Maybe you could start a fund for him or something.

We bought Gordon a Harley, I think we should buy Squire Smisek a turbocharged Hyabusa.

 

[SuperFLUF]

The biggest difference from a year ago was spending on fuel, which plunged by about one-third, as prices were much lower than they were in late 2008. The airline spent $388 million less on fuel than it did a year earlier.

How much less would we have spent on fuel had it not been hedged when oil was $140/bbl?
Close to a BILLION dollars.

Who got fired over that? No one.

 

[Hutchman]

How much less would we have spent on fuel had it not been hedged when oil was $140/bbl?
Close to a BILLION dollars.

Who got fired over that? No one.

Jeff Misner. Departed last year with a golden parachute. Replaced by Zane Rowe.

 

[Schwanker]

How much less would we have spent on fuel had it not been hedged when oil was $140/bbl?
Close to a BILLION dollars.

Who got fired over that? No one.

Why fire if you can furlough pilots instead? It's Bush's fault!!!

 

[Mike man]

So they made $81 million fake dollars but $4 million real dollars?

How exactly does that work? There must be a pilot with a CPA somewhere on this board. What happened to our revenue was X our expenses were Y and out profit/(loss) was Z?