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CAL Loses more money

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Jan 15, 2002
Pretty Bold Statement from Berthune. Interested to hear how SWA did this Quarter.

HOUSTON, April 15, 2002 -- Continental Airlines (NYSE: CAL) today reported a first quarter net loss of $114 million ($1.79 diluted loss per share) excluding a previously announced special charge, which compares favorably to the First Call estimate of $1.97 loss per share. Including the special charge, Continental reported a net loss of $166 million ($2.61 diluted loss per share).
Despite reporting a loss for the full quarter, Continental recorded positive pre-tax income of $25 million in March, the carrier’s first profitable month since Sept. 11. “Our team of professionals has once again outperformed all others in our crippled industry,” said Gordon Bethune, Continental Airlines’ chairman and chief executive officer. “Industry capacity excesses overshadow our successes in operational performance, revenue generation and cost management.”
If you listen to the quarterly conference call, you will see that Bethune needs to stick to his job as CEO and give up trying to be Mr. Funny Man. A comedian he is not. An arrogant, smart, egotistical CEO, he is. Some of the stats from the call:

CAL will take delivery of 6 jets from Boeing in the 2nd quarter and will defer 29 deliveries to the 4th quarter of 2003. They have also deferred 39 "other oustanding firm orders" as well. All of these will be taken between 4th quarter '03 to '08. During the quarter, CAL set 10 new company records for operational performance:

-Completion Factor = 99.8%
-31 Days of 100% completion factor
-On time rate = 85.1%
-Systemwide load factor = 74.0% (~3 points above industry avg)

That is the good news. The bad news is revenue, yield, capacity, etc.

-Capacity down 11.4%
-Yield down 15.2%
-RASM down 11.8%
-Business mix is at 42.2% (up 2.5% from last qtr, but down 12% year over year) Tough to get a good hold on this number with all of the fare changes/restrictions, or lack thereof.
-EWR capacity down 15%
-CLE capacity down 13%
-IAH capacity down 4.7% (must be all the Enron and Compaq folks getting out of town)
-Expecting year end capacity to be down 5-6% (so hey, they must be planning to add 5% capacity from today, eh?)

Company has over 1 billion in cash, goal is to have 1.5 billion by year end. Options are open for the federal loan guarantees, more as a defensive move, as there are no plans to file for them, but just in case, I suppose. A question was asked if the company would have been profitable in March without Express and the run around answer was "uh..no, probably break even" and they stammered on about Easter being helpful, etc. Bottom line, without Express, CAL would not have made as much money in March. Should be interesting when they spin it off this week. No mention of the boatload of RJ deliveries being taken at Express this year (something like one a week). Cash burn is being looked at on a daily basis and right now they stated that they are even on that front. Call 1-800-231-6723 if you want to hear the other nit-noid numbers and suffer through Gordon's attempt at humor or go to the web and find it on the CAL page. Only slight mention of the negotiations with the mechanics and the pilots, but no mention of recalls, then again, the question wasn't asked. TTYL,

-#1 Windmilling

P.S. Gord is obviously pissed at AAL, UAL, and AWA for dumping capacity on the market. He keeps referring to it as the "testosterone" out there. Whatever....
CAL was trying to boost yields by raising business fares by $20 a head. The other carriers followed suit but then backed off when Northwest refused to increase their fares.

I guess NW doesn't need to make money.
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NWA has lots of CASH $$$ on hand!

I think NWA has about $2.5 billion in cash.
Not to shabby.
Believe it or not they are in better shape financially than most of the other Majors.

Furloughed CAL pilot

CAL has NO equity. Gordo in his infinite wisdom decided these last years to pay the stock holders and not to pay down debt. Thus you have the XJT IPO to raise cash and of course the Gov. bail-out program. Personally I think GB is an a$$. NWA probably is in much better financial health. They unlike CAL paid down debt when they could therefore increasing equity.

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