Citing the impact of continued yield erosion, high fuel costs and the growing presence of low-cost carriers, Continental Airlines Chairman and CEO Larry Kellner reported yesterday that the carrier lost $206 million in the fourth quarter compared to income of $47 million in the final period of 2003.
Excluding special items, the 2004 loss narrowed to $174 million. ATWOnline calculated that without special gains, CO would have lost $38 million in the year-earlier period.
Special charges in the 2004 quarter included $18 million related to future frequent-flier mileage liabilities and a $14 million writeoff owing to the retirement of the airline's MD-80s. In 2003, special gains included $132 million from the sale of holdings in Hotwire and Orbitz and $24 million from a readjustment of future frequent-flier liability partially offset by $21 million in charges related to early MD-80 lease terminations.
Operating revenues rose 6.6% to $2.4 billion. Load factor climbed 2.4 points to 77.9% on a 10.1% hike in RPMs, but yield fell 4.2% to 11 cents, resulting in a 1% drop in passenger RASM to 8.57 cents. Operating expenses climbed 14.6% to 2.56 billion, producing an operating loss of $161 million versus operating income of $16 million in 2003. Cost per ASM rose 4.7% to 9.98 cents but declined 3.8% if fuel expense and special items are excluded.
Commenting on the outlook for 2005, Kellner said Continental has "another tough year ahead of us." Executives said they expect Delta Air Lines' fare reform to impact revenues negatively.
Executive VP and CFO Jeff Misner said CO has chalked up more than $900 million in cost cuts, "including achieving approximately $300 million of savings from our best business partners and suppliers." The airline is seeking $500 million in wage and benefit givebacks from its employees and has imposed $169 million on nonunion workers. It hopes to reach agreements with its unions covering the remaining $331 million by Feb. 28. The cuts are necessary for it to finalize last month's order for 10 7E7s.
For the full year, Continental lost $363 million compared to income of $38 million in 2003. If special items are excluded from both periods, the 2004 net loss totaled $255 million versus a deficit of $209 million in 2003. Operating revenues rose 9.9% to $9.74 billion while operating expenses climbed 15.1% to $9.97 billion. Operating loss totaled $229 million against operating income of $203 million in 2003.--Perry Flint
ATW-Online Dateline: Friday January 21, 2005
Also to CO the best of luck, as it is one of the favorrite airline in the region
Excluding special items, the 2004 loss narrowed to $174 million. ATWOnline calculated that without special gains, CO would have lost $38 million in the year-earlier period.
Special charges in the 2004 quarter included $18 million related to future frequent-flier mileage liabilities and a $14 million writeoff owing to the retirement of the airline's MD-80s. In 2003, special gains included $132 million from the sale of holdings in Hotwire and Orbitz and $24 million from a readjustment of future frequent-flier liability partially offset by $21 million in charges related to early MD-80 lease terminations.
Operating revenues rose 6.6% to $2.4 billion. Load factor climbed 2.4 points to 77.9% on a 10.1% hike in RPMs, but yield fell 4.2% to 11 cents, resulting in a 1% drop in passenger RASM to 8.57 cents. Operating expenses climbed 14.6% to 2.56 billion, producing an operating loss of $161 million versus operating income of $16 million in 2003. Cost per ASM rose 4.7% to 9.98 cents but declined 3.8% if fuel expense and special items are excluded.
Commenting on the outlook for 2005, Kellner said Continental has "another tough year ahead of us." Executives said they expect Delta Air Lines' fare reform to impact revenues negatively.
Executive VP and CFO Jeff Misner said CO has chalked up more than $900 million in cost cuts, "including achieving approximately $300 million of savings from our best business partners and suppliers." The airline is seeking $500 million in wage and benefit givebacks from its employees and has imposed $169 million on nonunion workers. It hopes to reach agreements with its unions covering the remaining $331 million by Feb. 28. The cuts are necessary for it to finalize last month's order for 10 7E7s.
For the full year, Continental lost $363 million compared to income of $38 million in 2003. If special items are excluded from both periods, the 2004 net loss totaled $255 million versus a deficit of $209 million in 2003. Operating revenues rose 9.9% to $9.74 billion while operating expenses climbed 15.1% to $9.97 billion. Operating loss totaled $229 million against operating income of $203 million in 2003.--Perry Flint
ATW-Online Dateline: Friday January 21, 2005
Also to CO the best of luck, as it is one of the favorrite airline in the region