Record fuel prices hurt results for full year; weak economic environment impacts fourth quarter
Houston – Continental Airlines today reported a 2008 net loss of $585 million ($5.54 diluted loss per share). Excluding $234 million of previously announced special items, Continental recorded a net loss of $351 million ($3.32 diluted loss per share) for the year.
Weakening economic conditions and highly volatile fuel prices presented financial challenges for the airline in the fourth quarter 2008. Continental recorded a fourth quarter net loss of $266 million ($2.33 diluted loss per share). Excluding $170 million of previously announced special items, Continental recorded a fourth quarter net loss of $96 million ($0.84 diluted loss per share).
For the full year 2008, jet fuel prices exhibited significant volatility, reaching record high levels and dramatically increasing costs over 2007. Consolidated fuel cost totaled $5.9 billion in 2008, a $1.9 billion increase over 2007, with mainline fuel cost totaling $4.9 billion, a $1.6 billion increase over 2007. During the year, the price of a barrel of crude oil peaked at $147.27 on July 11, then fell to a low of $32.40 on December 19, the first time in almost five years that the price fell below $35.00. For 2008, mainline fuel cost was $3.27 per gallon, including a $0.10 per gallon net cost of effective fuel hedges.
„I want to thank my co-workers for working together to meet tough operational and financial challenges during the year,“ said Larry Kellner, Continental’s chairman and chief executive officer. „While there are continuing hard times ahead, thanks to our team, we are well-positioned to maintain our place as an industry leader.“
Fourth Quarter Revenue and Capacity
Total revenue for the fourth quarter was $3.5 billion, a decrease of 1.5 percent compared to the same period in 2007.
Consolidated revenue passenger miles (RPMs) for the fourth quarter decreased 8.1 percent year-over-year on a capacity decrease of 7.4 percent, resulting in a fourth quarter consolidated load factor of 78.7 percent, 0.7 points lower than the fourth quarter 2007.
Consolidated yield for the fourth quarter increased 5.7 percent year-over-year. Consolidated revenue per available seat mile (RASM) for the fourth quarter increased 4.8 percent year-over-year due to increased yields.
Mainline RPMs in the fourth quarter of 2008 decreased 8.5 percent compared to the fourth quarter 2007, on a capacity decrease of 8.0 percent year-over-year. Mainline load factor was 79.3 percent, down 0.4 points year-over-year.
Continental’s mainline yield increased 6.4 percent in the fourth quarter over the same period in 2007. As a result, fourth quarter 2008 mainline RASM was up 5.9 percent over the fourth quarter of 2007.
