Continental Airlines Announces First Quarter Loss

Results adversely affected by significant declines in high yield traffic

HOUSTON , April 22 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL) today reported a first quarter 2009 net loss of $136 million ($1.10 diluted loss per share). First quarter results were adversely affected by significant declines in high yield traffic as many business travelers curtailed travel or purchased lower yield economy tickets due to the weakened economy. Fuel expense declined $527 million (41.8 percent) in the first quarter 2009 compared to the first quarter 2008. Excluding $4 million of aircraft-related charges, Continental recorded a net loss of $132 million ($1.07 diluted loss per share).

"My co-workers did a great job of working together to meet continued challenges during a tough quarter," said Larry Kellner , Continental's chairman and chief executive officer. "They displayed resilience and remained focused on running a solid operation."

First Quarter Revenue and Capacity

Total revenue for the quarter was $3.0 billion, a decrease of 17.0 percent compared to the same period in 2008. Passenger revenue for the quarter fell 18.8 percent ($606 million) compared to the same period last year due to lower fares and passenger traffic declines. Consolidated average fares dropped 7.4 percent during the quarter compared to first quarter 2008, declining 16.3 percent in March 2009 versus March 2008 .

Consolidated revenue passenger miles (RPMs) for the first quarter decreased 11.2 percent year-over-year on a capacity decrease of 7.2 percent, resulting in a first quarter consolidated load factor of 75.2 percent, 3.3 points lower than the first quarter of 2008.

Consolidated yield for the first quarter decreased 8.6 percent year-over-year. Consolidated passenger revenue per available seat mile (RASM) for the first quarter decreased 12.5 percent year-over-year.

Mainline RPMs in the first quarter of 2009 decreased 11.2 percent compared to the first quarter of 2008, on a capacity decrease of 7.6 percent year-over-year.

Mainline load factor was 75.8 percent, down 3.0 points year-over-year. Continental's mainline yield decreased 7.6 percent in the first quarter over the same period in 2008. As a result, first quarter 2009 mainline RASM was down 11.2 percent compared to the first quarter of 2008.

Passenger revenue for the first 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 first quarter 2009 decreased 30.3 percent ($37 million) compared to the same period 2008, due to reduced freight volume and lower pricing. Other revenue increased 15.6 percent ($35 million) due to checked bag fees, partially offset by changes in how certain costs are accounted for under Continental's capacity purchase agreement with ExpressJet.

First Quarter Operations and Notable Accomplishments

During the quarter, Continental recorded a U.S. Department of Transportation (DOT) on-time arrival rate of 76.4 percent and a systemwide mainline segment completion factor of 99.2 percent and employees earned a total of $3 million in cash incentives for achieving on-time performance goals.

The DOT tentatively approved the application for Continental to join the existing antitrust immunized alliance between United Airlines and eight other Star Alliance member carriers. This alliance will benefit consumers, ensure global competition with other antitrust immunized alliances and encourage the retention and growth of open skies between the U.S. and other nations. Continental remains a full member of SkyTeam through Oct. 24, 2009 , and is focused on providing a customer-friendly transition to Star.

"We are excited to be joining Star Alliance , which will bring unparalleled benefits to our customers worldwide, and growth opportunities for Continental and its employees," said Jeff Smisek , president and chief operating officer. "We look forward to working with our Star partners, as we create new and substantial competition with other global alliances."