After enduring pay and benefit cuts in recent years, employees at Continental Airlines will soon get a share of the 2006 profit.
The Houston-based airline announced Thursday it posted a yearly profit of $343 million. It also reported a fourth-quarter net loss of $26 million.
The carrier plans to distribute $111 million to employees on Feb. 14 under its profit-sharing plan. The last time it paid profit sharing was for 2000.
"Profit sharing is a way for flight attendants to begin recouping some of the concessions, the cost savings they provided the company," said Joe Tiberi, a spokesman for the International Association of Machinists and Aerospace Workers, which represents Continental's flight attendants.
Other work groups, including pilots and mechanics, also granted concessions with the agreement they would get money back when Continental returned to profitability.
Continental said it needed such cuts after the airline industry lost billions over several years and saw several major carriers, including Delta, Northwest and United file for bankruptcy protection.
Continental Chairman and Chief Executive Officer Larry Kellner said Thursday that 2006 revenue was up 17.1 percent, helped by the airline carrying more passengers and continued cost reduction plans.
"Because of the hard work of my more than 44,000 co-workers, we were able to deliver solid results for the year," Kellner said. "We look forward to distributing $111 million in profit sharing on Valentine's Day."
Continental also paid its employees bonuses twice during the fourth quarter, based on the carrier's performance in the Department of Transportation's monthly on-time rankings.
During a conference call with analysts and reporters, Kellner answered questions about potential consolidation in the airline industry by simply saying that Continental would do what was best for shareholders, employees and other stakeholders.
Kellner said Continental grew faster than executives planned, at close to 9 percent. Executives had planned for growth of 7 to 8 percent.
Much of the extra growth was at the carrier's New York-area hub in Newark, where Kellner said it had to make sure it did not lose market share.
Continental has been focused on international growth, adding scores of new routes in recent years.
The carrier plans to take delivery of 65 new planes over the next three years and retire older, less efficient aircraft. The new planes will include two Boeing 777s for use in international expansion.
In part because of its international growth, Continental posted a smaller-than-expected fourth-quarter loss.
Continental reported a net loss of $26 million for the fourth quarter, or 29 cents per share, compared with a net loss for the same period a year ago of $43 million, or 53 cents per share.
Excluding a special charge of $22 million for lump-sum payments to retiring pilots, the carrier posted a fourth-quarter loss of $4 million, or 4 cents per share.
Lehman Bros. analyst Gary Chase said Continental's costs were slightly lower than expected.
Shares of Continental fell $1.77 to close at $48.23 on the New York Stock Exchange.
Continental's net income for last year improved despite having to pay $510 million more in fuel than the previous year, the carrier said.
For 2007, Continental is expecting to continue a strong showing. Passenger bookings for the next six weeks will be slightly higher than a year ago, President Jeff Smisek said.
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