New CAL projection

lineflyer1

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Kellner announces capacity reduction
http://money.cnn.com/news/newsfeeds/...7_FORTUNE5.htm

Continental Air Braces For Weak Travel Outlook

January 29, 2009: 02:17 PM ET


(Updates with hedging losses at US Airways and ARS losses at JetBlue.)
By Ann Keeton
Of DOW JONES NEWSWIRES



CHICAGO -(Dow Jones)- Continental Airlines Inc. (CAL) said Thursday that bookings were lower across its international network and said it will cut capacity because of falling passenger demand, especially for business travel.


The Houston-based carrier said six-week forward bookings for its transatlantic routes were 6% to 7% lower than last year, though domestic business was higher.


Even the once-resilient Latin American market, a key focus for Continental, is weakening.


Chairman and Chief Executive Larry Kellner said on a conference call that business travel has been especially hard-hit, with front-of-cabin sales off " significantly" over the Atlantic. Still, he said, "Our international business is still solid, just less profitable."


Kellner said fare sales have increased across the industry.
Continental plans to cut mainline seat capacity by 3.5% to 4.5% this year, with domestic routes shrinking by 6% to 7%, and the profitable international routes down 1% to 2%.

Kellner said the carrier can cut more capacity this year if the travel market continues to weaken, though the airline has no plans to cut jobs this year.


J.P. Morgan analyst Jamie Baker said Continental's outlook for 2009 is better than expected on the cost side, in part due to lower pension expenses than peers, including American Airlines, a unit of AMR Corp. (AMR), and Delta Air Lines Inc. (DAL). Kellner said Continental saves money by paying out most retiree pensions in a lump sum.


Growth On Hold


On the conference call, Kellner said this year the airline will focus on strengthening revenue, maintaining cash and making a smooth transition in October to the Star airline alliance from its current partnership in the SkyTeam grouping.


Continental plans to cement business ties in a joint venture with United Airlines, parent of UAL Corp. (UAUA).
Kellner declined to give an outlook for revenue growth and said the company is in a good cash position, with $2.64 billion on hand at the end of 2008.


Continental, the fourth-largest U.S. airline by passenger traffic, remains committed to a long-term plan to grow 5% to 7% per year, Kellner said.
The airline must grow to remain competitive with larger airlines, he said, adding that Continental needs to maintain a strong domestic route network to feed into international routes.


The long-term growth plan will be on hold for two to three years, Kellner said, not only because of the worldwide recession, but also because Continental's growth partly depends on adding new Boeing 787 aircraft to its fleet.
 

EWR_FO

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This isn't new at all, it is simply an early attempt to manage expectations. This exact plan was already covered in previous shareholder reports.

They are using the same playbook that has worked over and over, sooner or later we will get 50% +1 to figure it out. Now that the guys who are afraid of their own shadow have been marginalized, we actually may make some progress.
 

tie1on

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these are management expectations re-projected or whatever you would like to call. these details were given in previous 10k filings.

they are attempting to scare everyone, because it has worked before.
 

Homer Jay

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This is airline number 3 and I have seen this at each one. Don't fall for it! I'm voting no on any first round TA!
 
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