Continental Airlines, Inc. (CAL), Thursday, reported a profit for the fourth quarter, compared with a loss last year, driven by lower fuel costs and an income tax benefit. However, the Houston, Texas-based air carrier's results reflected the decline in high yield traffic due to the global recession. Total revenue declined 8.3%, reflecting lower passenger as well as cargo revenues.
The company's fourth-quarter net income was $85 million or $0.60 per share, compared with a loss of $269 million or $2.35 per share a year ago.
Excluding $77 million of special charges, and a $158 million non-cash income tax benefit, the company recorded a net income of $4 million or $0.03 per share in the quarter, in comparison with a loss of $295 million or $2.28 per share in the prior-year quarter.
On average, 9 analysts polled by Thomson Reuters expected loss per share of $0.07 for the quarter. Analysts' estimate typically excludes one-time items.
The company said the fourth-quarter results continued to be adversely affected by declines in high yield traffic due to lower travel demand as a result of the global recession.
Total revenue for the fourth quarter was $3.18 billion, a decline of 8.3% from $3.47 billion for the same period in 2008. Six analysts had a consensus revenue estimate of $3.19 billion for the quarter.
For the sequential third quarter, Continental's net loss was $18 million or $0.14 per share on revenues of $3.32 billion.
Passenger revenue dropped 9.5% in the fourth quarter to $2.81 billion from $3.10 billion a year ago, due to lower yields. Domestic passenger revenue reached $1.17 billion, a decline of $9.8% from the fourth quarter of 2008. Total mainline passenger revenue decreased 10.4% from last year to $2.31 billion. Regional passenger revenue was $502 million, 5.4% lower than the prior-year quarter.
The company's cargo revenues were $107 million, down 6.1% from $114 million in the previous year, mainly due to lower year-over-year fuel surcharges. Other revenue was $14 million higher than the prior year, driven by higher bag fee revenue.
Consolidated revenue passenger miles, or RPMs for the quarter rose 3.5% on a capacity decrease of 0.6% year-over-year. Mainline RPMs were up 3.7% on a mainline capacity decrease of 0.5% from last year.
Fourth-quarter consolidated load factor was 82%, 3.3 points higher than the fourth quarter of 2008. Consolidated yield decreased 12.6%, and as a result, consolidated passenger revenue per available seat mile, or RASM, declined 9% from the fourth quarter of 2008.
For the month of December, Continental's traffic was up 6% to 7.5 billion RPMs and capacity rose 2.1% to 9.1 billion consolidated available seat miles, or ASMs. Consolidated load factor for December was 83%, up 3.1 points from December 2008.
Aircraft fuel costs and related taxes declined 32.4% to $809 million from $1.2 billion a year ago. Driven by lower jet fuel costs, Continental's mainline cost per available seat mile, or CASM, decreased 8.6% in the fourth quarter. The average mainline price of a gallon of fuel dropped 31.7% from last year and mainline fuel consumption dropped 1.5%. Fuel expense for the quarter was down 32.4% year-over-year as a result of a decrease in fuel prices and lower volumes.
Continental said it joined Star Alliance in the fourth quarter of 2009 to provide customers access to the 25-member airline network. The company also stated that it is scheduled to take delivery of 12 Boeing 737 aircraft and two Boeing 777 aircraft in 2010. Delivery of one leased Boeing 757-300 aircraft is expected to take place in the first quarter of 2010. The company also expects to remove from service its last three Boeing 737-300 aircraft by the end of the first quarter of 2010.
Further, Continental stated that it continued to install winglets on its fleet of Boeing 757-300 aircraft to improve efficiency. The company expects to complete installation of winglets on its entire narrowbody fleet by the end of the second quarter of 2010.
In the fourth quarter, Continental completed the sale of $644 million of enhanced equipment trust certificates to be secured by a total of 19 owned aircraft. A portion of the proceeds from the sale of the certificates will be used to finance the company's purchase of nine new Boeing 737-800 and two Boeing 777 aircraft. The remainder of the proceeds will be used for general corporate purposes. The funds are expected to be received in the first half of 2010.
For fiscal 2009, Continental incurred a net loss of $282 million or $2.18 per share, narrower than a net loss of $586 million or $5.54 per share a year ago. Excluding $145 million of special charges, and a $158 million non-cash income tax benefit, the company's net loss for the year was $295 million or $2.28 per share. Full-year revenue was down 17.4% at $12.59 billion compared to $15.24 billion in the previous year. Analysts projected a loss of $2.46 per share on revenues of $12.59 billion.
Among others in the sector, AMR Corp. (AMR), the operator of American Airlines, Inc., reported a narrower loss for the fourth quarter, as reduction in traffic slowed down after a while. For the fourth quarter, AMR's net loss narrowed to $344 million or $1.03 per share from $347 million or $1.24 per share in the prior-year quarter. Hurt by lower cargo revenue and mainline passenger unit revenue as well as reduced capacity, total revenues dropped 7.4% to $5.06 billion from $5.47 billion in the prior-year quarter.
Southwest Airlines Co. (LUV) today reported fourth-quarter net income of $116 million or $0.16 per share, compared to a net loss of $56 million or $0.08 loss per share, for the fourth quarter of 2008. Total operating revenues decreased 0.8% to $2.71 billion from $2.73 billion in the year-ago quarter. The company expects another year-over-year increase in unit revenue for the first quarter of fiscal 2010.
Delta Air Lines Inc. (DAL) is set to announce its results on January 26. Wall Street analysts project a loss of $0.24 per share on revenues of $6.86 billion.
Going forward, Jeff Smisek, Continental's Chairman, president and chief executive officer, stated, "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."
CAL is trading at $21.085, up $0.465, on a volume of 1.85 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.