Continental Airlines posts full-year loss
HOUSTON, Jan. 21, 2010 - Continental Airlines (NYSE: CAL) today announced a 2009 full-year net loss of $282 million ($2.18 diluted loss per share). Excluding $145 million of previously announced special charges, and a $158 million non-cash income tax benefit, Continental recorded a net loss of $295 million ($2.28 diluted loss per share) for the year.
For the fourth quarter of 2009, Continental reported a fourth quarter net income of $85 million ($0.60 diluted earnings per share). Excluding $77 million of previously announced special charges, and a $158 million non-cash income tax benefit, Continental recorded a fourth quarter net income of $4 million ($0.03 diluted earnings per share).
Full-year 2009 and fourth-quarter results continued to be adversely affected by declines in high yield traffic due to the global recession.
“My co-workers have done a superb job working through enormous challenges in 2009, while providing the best customer service and product in the business,” said Jeff Smisek, Continental’s chairman, president and chief executive officer. “While we are seeing some business traffic increasing, we likely have a long and slow road to recovery. We remain focused on achieving and maintaining profitability.”
Fourth Quarter Revenue and Capacity
Total revenue for the fourth quarter of 2009 was $3.2 billion, a decrease of 8.3 percent compared to the same period in 2008. Passenger revenue for the fourth quarter fell 9.5 percent ($296 million) compared to the same period in 2008 due to lower yields.
Consolidated revenue passenger miles (RPMs) for the fourth quarter of 2009 increased 3.5 percent on a capacity (available seat mile, ASM) decrease of 0.6 percent year-over-year.
Consolidated load factor was a fourth quarter record 82.0 percent, 3.3 points higher than the fourth quarter of 2008. Consolidated yield for the quarter decreased 12.6 percent year-over-year. As a result, fourth quarter 2009 consolidated passenger revenue per available seat mile (RASM) decreased 9.0 percent year-over-year.
Mainline RPMs in the fourth quarter of 2009 increased 3.7 percent on a mainline capacity decrease of 0.5 percent year-over-year.
Mainline load factor of 82.6 percent was also a fourth quarter record, up 3.3 points year-over-year. Continental’s mainline yield decreased 13.6 percent in the fourth quarter over the same period in 2008. As a result, fourth quarter 2009 mainline RASM was down 9.9 percent compared to the fourth quarter of 2008.
Passenger revenue for the fourth quarter of 2009 and period-to-period comparisons of related statistics by geographic region for the company’s mainline operations and regional operations are as follows:
Cargo revenue in the fourth quarter of 2009 decreased 6.1 percent ($7 million) compared to the same period in 2008, principally due to lower year-over-year fuel surcharges. Other revenue during the fourth quarter of 2009 was $14 million higher than the prior year due primarily to higher bag fee revenue.
Fourth Quarter Operations
Continental’s employees earned a total of $3 million in cash incentives for on-time performance during the quarter. The company recorded a U.S. Department of Transportation (DOT) on-time arrival rate of 77.2 percent and a systemwide mainline segment completion factor of 99.4 percent during the quarter.
Global Reach with Star Alliance
Continental Airlines joined Star Alliance in the fourth quarter of 2009, providing significantly improved benefits to customers including access to the world’s largest airline network and reciprocal frequent flier and airport lounge benefits with Star Alliance’s 25 other member airlines around the world.
“Thanks to the focus and hard work of my co-workers, we successfully transitioned to Star Alliance,” said Jim Compton, Continental’s executive vice president and chief marketing officer. “Our hubs are a perfect fit for Star Alliance and our customers now enjoy a network second to none.”
To enhance connectivity with Star Alliance member carriers, Continental launched nonstop service between Houston and Frankfurt, Germany on Nov. 1, 2009 and announced that it will launch daily nonstop service between its New York hub at Newark Liberty International Airport and Munich beginning March 27, 2010. Also in connection with joining Star Alliance, the company began service to several new destinations during the quarter, including nonstop service between Houston and Edmonton, Canada, and daily nonstop service from Houston and Cleveland to Washington Dulles International Airport. In addition, Continental began new service from Guam and Honolulu to Nadi, Fiji on Dec. 18, 2009.
To facilitate easy connections between Continental’s flights and those of other Star Alliance airlines, Continental successfully relocated its operations at several key airports, including Chicago, Frankfurt, Narita, Honolulu and Beijing.
Continental, United and All Nippon Airways (ANA) filed an application with the DOT for antitrust immunity to enable the three carriers to create a more efficient and comprehensive trans-Pacific network, generating substantial service and pricing benefits for consumers. The trans-Pacific joint venture - the first of its kind between the U.S. and Asia - will also enable Continental, United and ANA to compete more effectively with other global alliances, each of which has a significant presence in Tokyo.
Notable Product Enhancements
Continental’s first aircraft with new flat-bed BusinessFirst seats took to the skies in the fourth quarter of 2009, with installation complete on three aircraft; two Boeing 777s and a 757-200. Flat-bed seats are being installed on Continental’s entire fleet of Boeing 777, 757-200, 767-200 and substantially all of its 767-400 aircraft, and on its Boeing 787 fleet as the aircraft are delivered to Continental.
Continental continued to install DIRECTV