Continental Airlines Announces First Quarter Loss

Continental was again rated the top airline on FORTUNE magazine's annual airline industry list of World's Most Admired Companies. This is the sixth consecutive year that Continental has topped that list. The rankings are determined in a survey of corporate and airline executives, boards of directors and industry analysts. Companies are evaluated according to quality of products/services, global competitiveness, people management, social responsibility, innovation, use of corporate assets, financial soundness, long-term investment and quality of management.

Continental was the first U.S. carrier to inaugurate daily nonstop scheduled service between New York and Shanghai on March 25 , linking the world's financial center and top business and tourism destination with China's center for finance and trade. With the new service to Shanghai , Continental is the only airline in the world providing daily nonstop service between New York and three Chinese cities; Shanghai , Beijing and Hong Kong .

Continental received approval from the DOT to operate daily year-round nonstop service between its Houston hub at Bush Intercontinental Airport and Rio de Janeiro, Brazil and through flight service between New Orleans and Rio de Janeiro beginning summer 2009, pending final government approvals.

During the quarter, Continental began installing DIRECTV, which will provide up to 80 channels of live, satellite-based television programming, movies and TV shows on its aircraft. More than 200 of Continental's next generation Boeing 737s and 757-300 aircraft will be equipped with the system by the end of 2010.

Continental contributed $50 million to its defined benefit pension plans during the first quarter of 2009. On April 9, 2009 , the company contributed an additional $50 million to its defined benefit pension plans.

Continental was the first commercial carrier to successfully demonstrate the use of sustainable biofuel to power an aircraft in North America . During the demonstration flight, Continental's test pilots successfully conducted a number of flight maneuvers, and the biofuel met all performance requirements as compared to traditional jet fuel. The biofuel blend included components derived from algae and jatropha plants, both sustainable, second-generation sources that do not impact food crops or water resources or contribute to deforestation.

First Quarter Costs and End of Quarter Cash

Due to significantly lower jet fuel costs, Continental's mainline cost per available seat mile (CASM) decreased 10.4 percent (10.8 percent excluding special items) in the first quarter compared to the same period last year. The mainline price of a gallon of fuel dropped 34.6 percent year-over-year and mainline fuel consumption fell by 11.2 percent. Holding fuel rate constant and excluding special items, first quarter 2009 mainline CASM increased 0.9 percent compared to the first quarter of 2008.

"This strong CASM performance, despite decreases in capacity, is a tribute to the ongoing focus on efficiency and cost control by the entire Continental team," said Zane Rowe , Continental's executive vice president and chief financial officer.

Consolidated fuel price was $1.82 per gallon in the first quarter 2009, of which $0.35 per gallon was related to Continental's fuel hedges. Consolidated fuel price was $2.80 per gallon in the first quarter 2008.

Continental ended the first quarter with $2.65 billion in unrestricted cash, cash equivalents and short-term investments.

Fleet Changes Continue to Improve Efficiency

Continental continued to improve fuel efficiency during the quarter by adding modern, fuel-efficient aircraft to its fleet and installing winglets on additional aircraft. During the quarter, Continental took delivery of four new Boeing 737-900ERs. In addition, the company removed from service three Boeing 737-300s and returned to service two Boeing 737-500s that were temporarily grounded at Dec. 31, 2008 .