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Continental Posts Narrower Fourth-Quarter Loss

Continental Airlines
CNBC.com
Continental Airlines

Continental Airlines, the world's fifth-largest airline, said Thursday its fourth-quarter loss narrowed by 40%, as strong fare pricing helped offset increased fuel and labor costs.

The network carrier, which has explored the possibility of a merger with UAL's United Airlines, posted a quarterly loss of $26 million, or 29 cents per share, compared with a loss of $43 million, or 53 cents per share, a year ago. Excluding a charge of $22 million related to lump-sum payments to retiring pilots, the company recorded a loss of $4 million, or 4 cents per share, in the latest period.

Continental said quarterly operating income totaled $20 million -- or $42 million excluding one-time charges -- the carrier's largest fourth-quarter operating profit since 2000.

Total revenue grew 11% to $3.16 billion from $2.85 billion last year, driven by double-digit percentage growth in its international regions.

Analysts surveyed by Thomson Financial were looking for a loss of 15 cents per share on revenue of $3.16 billion.

Consolidated revenue passenger miles increased 8.7% year-over-year on a capacity increase of 6.1%, resulting in total load factor of 79.8% -- up 1.9 points from 2005.

A revenue passenger mile equals one passenger flown one mile. Load factor represents occupancy, or the percentage of seats filled on a plane.

Total yield for the quarter increased 1.8%, with revenue per available seat mile rising 4.3% year-over-year due to increased yield and record load factors. Yield represents average fares.

"In 2006, we grew revenue at almost twice the rate we grew capacity, and we grew mainline capacity more than any of the other major network carriers," said Jeff Smisek, president of Continental.

Continental ended the fourth quarter with about $2.48 billion in unrestricted cash and short-term investments.

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