CAL Bucking Trend...Sees Profit

[Ex737Driver]

http://biz.yahoo.com/ap/071213/continental_airlines_outlook.html?.v=3


Continental Says Advance Bookings Up
Thursday December 13, 6:48 pm ET Continental Says Advance Bookings Have Risen

DALLAS (AP) -- Continental Airlines Inc. said Thursday travel demand remains strong, advance bookings are ahead of last year's pace, and pricing conditions are good for leisure and business tickets. The Houston-based airline said it expects flights to be just as full in the fourth quarter as they were a year ago despite a capacity increase of 4.7 percent.

The airline said it expects to increase capacity a more modest 2 to 3 percent next year, with U.S. capacity falling slightly.

Continental said it was spending $2.48 per gallon for jet fuel.
The airline made the comments in a filing with the Securities and Exchange Commission.
Continental expects fourth-quarter occupancy to be 79 to 80 percent, and 82 to 83 percent on domestic flights. The airline has added the most seats on trans-Atlantic flights, with more modest increases in the United States, the Pacific and Latin America.
JPMorgan analyst Jamie Baker said the comments pointed to "a respectable fourth-quarter profit" instead of the loss forecast by analysts surveyed by Thomson Financial. Baker said Continental's comments about strong pricing was a break from recent "uninspiring commentary" by Delta Air Lines Inc., JetBlue Airways Corp. and US Airways Group Inc.

 

[400ADude]

Congratulations CAL!

 

[bleagle]

Wow....great job....


Now the stock price should increase and CAL should go from buy to STRONG buy!

 

[Sedona16]

Nice work! Hey when is CAL up for contract negotiations?

 

[LJDRVR]

Section 6 starts this spring.

 

[Captain Overs]

Section 6 starts this spring.

Gulp!

 

[LJDRVR]

Gulp!

Get a life.

 

[pkober]

Happy Valentines Day, now here's your nice profit sharing check.

Looking good.

 

[SuperFLUF]

Section 6 starts this spring.

Its a bit ironic that the negotiating committee is scheduled to negotiate the seniority section next month.

I wonder if they'll finish that on time to start the section 6 items in April?

 

[Kugelblitz]

It's easy to post a profit when you both starve and don't insure your newhires and don't pay the rest of the pilot population a decent wage.

 

[ACWild]

It's easy to post a profit when you both starve and don't insure your newhires and don't pay the rest of the pilot population a decent wage.

A lot of airlines should be posting profits then.

 

[thor2j]

It's easy to post a profit when you both starve and don't insure your newhires and don't pay the rest of the pilot population a decent wage.

I guess that means everyone except FedEx and UPS (I would put SWA, but I am sure he would slam them for no retirement). Oh, wait UPS starting pay less then $35/hr. Well at least that leaves fedex.

 

[4got2flare]

Continental airlines: outlook stable
Wednesday, 19th December 2007
Source : Fitch Ratings
It has been affirmed that the debt ratings of Continental Airlines, Inc. is as follows: Issuer Default Rating (IDR) at 'B-';
Senior unsecured debt at 'CCC'/RR6 - concluding that the rating outlook for continental is stable.

Ratings for CAL reflect the airline's heavy fixed obligation funding burden, the risk of rising leverage levels in a potentially difficult 2008 industry operating environment, as well as ongoing vulnerability to fuel price and air travel demand shocks. While CAL's recent cash flow generation performance has been encouraging, the operating outlook is increasingly uncertain in light of $90-plus per barrel crude oil prices and growing worries over a possible U.S. economic slowdown in 2008.

Planned available seat mile (ASM) capacity growth will be relatively low next year (2-3%); however, CAL is financing new aircraft deliveries with additional secured debt, and it may see a modest increase in lease-adjusted leverage by year-end 2008.

Cost pressures remain a significant credit concern, especially in light of the big run-up in crude and refined product prices witnessed since September. With relatively modest fuel hedge positions in place (approximately 32% of Q4 purchases hedged with protection above $2.23 per gallon of jet fuel), operating margins will suffer this winter as a result of the fuel price spike.

Moreover, the outlook for 2008 is clearly being influenced by increasing doubts over the health of the U.S. economy and the resilience of both business and leisure air travel demand trends. Fitch expects revenue per available seat mile (RASM) growth for CAL and the entire industry to slow materially next year, pressuring margins and constraining free cash flow generation in a year when CAL's capital spending commitments and debt balances will rise.

On the positive side, CAL's liquidity position is now much stronger after two years of solid unit revenue expansion and good free cash flow generation. As of Sept. 30, unrestricted cash totaled $3 billion. CAL now expects year-end cash balances to total $2.7 billion to $2.8 billion. Fixed obligations for 2008 include approximately $629 million of scheduled debt maturities and approximately $200 million of required cash pension funding. Fitch expects CAL to continue funding its defined benefit pension plans at levels beyond minimum required amounts.

CAL continues to outperform the broader industry in terms of yield and RASM growth?despite the fact that it has been growing faster than most of the other U.S. legacy carriers. International route economics in particular have remained excellent, and the airline expects to grow its international operations further with recently-announced twice-daily trips to London-Heathrow from both the Houston and Newark Liberty hubs, as well as expansion into new Latin American markets to be met partially through the new B737 NG aircraft entering the fleet next year.

Industry-wide adjustments to 2008 capacity growth plans have been consistent during Q4, with CAL, Delta and Southwest all announcing earlier this month that they will pull some additional seats out of the domestic schedule for 2008. This provides some support for a more credible RASM soft landing scenario next year, but Fitch expects earnings and free cash flow to weaken as a result of the softening operating environment.

A change in the Rating Outlook to Positive could follow in 2008 if a significant pull-back in energy prices and/or a continuation of reasonably strong U.S. economic growth drives stable or improving margins and modest improvements in leverage and cash flow coverage metrics. Movement toward industry consolidation could also improve the credit outlook for CAL and all of the legacy carriers.