Tags: US | Earns | Continental

Continental Air Loses $146 Million on High Fuel Costs

Thursday, 22 Apr 2010 08:12 AM

 

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Continental Airlines lost $146 million in the first quarter — a wider loss than analysts expected — as higher fuel costs offset an increase in revenue.

The Houston-based airline said Thursday that revenue rose 7 percent, another sign that travel is slowly recovering from a deep slump.

The average price of a gallon of jet fuel jumped 17 percent, and Continental joined Delta Air Lines Inc. and American Airlines parent AMR Corp. in reporting big first-quarter losses.

The good news for Continental: Analysts believe it will make money the rest of this year as travel demand builds, especially on lucrative international routes.

Continental Airlines Inc. said it lost $1.05 per share in the first quarter. Without severance costs and other one-time write-downs, the loss would have been 98 cents per share.

Analysts, who usually don't include one-time items in their forecasts, expected a loss of 86 cents per share, according to a survey by Thomson Reuters.

Revenue rose to $3.17 billion, slightly higher than the expected $3.15 billion.

A year ago, Continental lost $136 million in the first quarter as traffic tumbled to $3 billion during the recession.

Continental has been able to make more money per seat, thanks to higher fares and fees on checked bags and other services.

Continental is the nation's fourth-biggest airline, but it's talking to No. 3 United Airlines about combining in a deal that would create the world's largest carrier, according to people who have been briefed on the talks.

In the first quarter, February snowstorms that shut down Continental's New York-area hub cost it $25 million in lost sales.

CEO Jeff Smisek called the first-quarter loss disappointing, but he said the revenue increase reflected a slowly improving global economy and benefits from Continental's alliance with other airlines including United. The airlines sell seats on each other's flights and can set prices together on trans-Atlantic flights.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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