CAL posts 1Q loss
04-17-2008, 04:32 AM
#1
Smells like teen spirit
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Joined APC: Jun 2007
Position: Mil and Civ
Posts: 216
CAL posts 1Q loss
Continental Airlines posts 1Q loss as fuel costs soar
1 hour ago
HOUSTON (AP) — Continental Airlines Inc. said Thursday that soaring fuel costs pushed it to a loss for the first quarter, and it plans to retrench by mothballing planes and reducing flights.
Houston-based Continental lost $80 million, or 81 cents per share, in the January-March period compared with a profit of $22 million, or 21 cents per share, a year earlier.
Excluding a gain on airplane sales, Continental said it would have lost 86 cents per share in the first three months of this year.
Analysts, who usually exclude one-time gains from their calculations, expected a loss of 93 cents per share, according to Thomson Financial.
Revenue rose 12.3 percent to $3.57 billion from $3.18 billion a year earlier, but costs rose even more quickly — up 16.7 percent.
Fuel was the leading culprit, jumping 53 percent — or $364 million — and surpassing labor as the airline's largest expense.
The airline said it would take 14 older Boeing 737-300 planes out of service between next September and April 2009, on top of planes it had already said it would sideline.
Continental grew over the past year, as capacity to carry passengers expanded by 4.1 percent. Yet, demand remained strong and planes averaged occupancy of 78.8 percent, down only slightly from a year earlier despite more seats.
But the airline said it would reduce domestic capacity 5 percent beginning this fall because of concern over record high fuel prices, a weakening economy and weak dollar. Including international routes, which are more profitable — Continental launched service to London's Heathrow Airport in March — the airline still expects to increase overall capacity by 2 percent for all of 2008.
Continental also plans to reduce regional jet capacity and is negotiating with its partners.
Also, Continental took a step toward a possible combination with another airline by buying out Northwest's right to veto a Continental merger. Continental was able to do that — for $100 — after Northwest Airlines Corp. announced Monday it had agreed to be acquired by Delta Air Lines Inc.
There has been speculation that Continental and UAL Corp.'s United Airlines could combine.
Unfortunately fuel costs bit us in the rear as well @ CAL. However, there are quite a few positives I believe you can gleam out of the article.
One, we beat the expected losses based on overall lookback (with obviously again fuel being the biggest kicker).
Two, revenue at CAL still rose this year 12.3% - a very good sign for the airline.
Three, we grew 4.1% and average occupancy still remained in the 78% range with planned overall capacity to continue to rise another 2% (obviously mainly on international routes).
And thank god, we're going to reduce RJ flying which is certainly a win for customers.
We're certainly down, but far from out.
1 hour ago
HOUSTON (AP) — Continental Airlines Inc. said Thursday that soaring fuel costs pushed it to a loss for the first quarter, and it plans to retrench by mothballing planes and reducing flights.
Houston-based Continental lost $80 million, or 81 cents per share, in the January-March period compared with a profit of $22 million, or 21 cents per share, a year earlier.
Excluding a gain on airplane sales, Continental said it would have lost 86 cents per share in the first three months of this year.
Analysts, who usually exclude one-time gains from their calculations, expected a loss of 93 cents per share, according to Thomson Financial.
Revenue rose 12.3 percent to $3.57 billion from $3.18 billion a year earlier, but costs rose even more quickly — up 16.7 percent.
Fuel was the leading culprit, jumping 53 percent — or $364 million — and surpassing labor as the airline's largest expense.
The airline said it would take 14 older Boeing 737-300 planes out of service between next September and April 2009, on top of planes it had already said it would sideline.
Continental grew over the past year, as capacity to carry passengers expanded by 4.1 percent. Yet, demand remained strong and planes averaged occupancy of 78.8 percent, down only slightly from a year earlier despite more seats.
But the airline said it would reduce domestic capacity 5 percent beginning this fall because of concern over record high fuel prices, a weakening economy and weak dollar. Including international routes, which are more profitable — Continental launched service to London's Heathrow Airport in March — the airline still expects to increase overall capacity by 2 percent for all of 2008.
Continental also plans to reduce regional jet capacity and is negotiating with its partners.
Also, Continental took a step toward a possible combination with another airline by buying out Northwest's right to veto a Continental merger. Continental was able to do that — for $100 — after Northwest Airlines Corp. announced Monday it had agreed to be acquired by Delta Air Lines Inc.
There has been speculation that Continental and UAL Corp.'s United Airlines could combine.
Unfortunately fuel costs bit us in the rear as well @ CAL. However, there are quite a few positives I believe you can gleam out of the article.
One, we beat the expected losses based on overall lookback (with obviously again fuel being the biggest kicker).
Two, revenue at CAL still rose this year 12.3% - a very good sign for the airline.
Three, we grew 4.1% and average occupancy still remained in the 78% range with planned overall capacity to continue to rise another 2% (obviously mainly on international routes).
And thank god, we're going to reduce RJ flying which is certainly a win for customers.
We're certainly down, but far from out.
04-17-2008, 07:31 AM
#3
I love my job!
Joined APC: Jan 2006
Position: B757 Capt
Posts: 276
To "mothball" and aircraft means to place it in long term storage. Continental does not have any plans to mothball any aircraft at this time.
From a company newsletter:
"Continental sold three 737-500 aircraft in the first quarter and received cash proceeds of $42 million, resulting in pre-tax gains of $8 million. Fourteen 737-500 aircraft are scheduled for delivery to purchasers by the end of 2008. The company has also entered into agreements to terminate the leases and arrange for the sale of eight additional leased Boeing 737-500 aircraft for delivery in 2009. All of these aircraft will be operated outside of the U.S. During the quarter, the company announced that it had added 27 aircraft to its firm order positions with Boeing. At the end of the quarter, Continental had firm commitments for 106 new Boeing aircraft (25 Boeing 787s, eight Boeing 777s and 73 Boeing 737s) for delivery over the next six years, with options to purchase an additional 102 aircraft."
From a company newsletter:
"Continental sold three 737-500 aircraft in the first quarter and received cash proceeds of $42 million, resulting in pre-tax gains of $8 million. Fourteen 737-500 aircraft are scheduled for delivery to purchasers by the end of 2008. The company has also entered into agreements to terminate the leases and arrange for the sale of eight additional leased Boeing 737-500 aircraft for delivery in 2009. All of these aircraft will be operated outside of the U.S. During the quarter, the company announced that it had added 27 aircraft to its firm order positions with Boeing. At the end of the quarter, Continental had firm commitments for 106 new Boeing aircraft (25 Boeing 787s, eight Boeing 777s and 73 Boeing 737s) for delivery over the next six years, with options to purchase an additional 102 aircraft."
04-17-2008, 07:41 AM
#4
Che Guevara
Joined APC: Aug 2005
Posts: 6,408
Someone send a letter to management telling them to put a plane on the STL-IAH route. I'm tired of not being able to get to work. I can't remember the last time I didn't see it overbook. Just checked them for tomorrow and sure enough they are filling up fast.
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