Continental reports Q2 loss

1,700 more jobs to go

Continental Airlines today (July 21) reported second quarter net losses of $213m.

It blamed a drop in business travellers and swine flu for the shortfall.

The Houston-based carrier said it was aiming to save $100m in the next year, partly through shedding a further 1,700 jobs.

It also said it planned to increase domestic check in baggage fees by $5 for those who do not pay in advance and raise the telephone booking fee by the same amount.

The airline said the job losses were in addition to the loss of 500 jobs among reservation agents and the 700 flight attendants offered extended leave of absence.

During the three months to the end of June, Continental said total revenue was $3.1bn, a fall of 22.7% compared to the same period in 2008.

Passenger revenue for the quarter fell 24.2% to $883m, compared to the same period last year due to lower fares and a decline in passenger traffic.

Continental announced last week that its chairman and ceo Larry Kellner was leaving to start his own private equity company.

He will be succeeded by his long time deputy Jeff Smisek, the airline's president and chief operating officer.

The airline said it had seen "significant declines in high yield traffic as many business travellers curtailed travel or purchased lower yield economy tickets due to the weakened economy."

It said it also lost about $50m in revenue form the affect of the H1N1 virus - swine flu - on travelling.

Continental said that its fuel bill for the three months to the end of June was at $762m, 46% less than for the same period in 2008.

But its revenue was down $918m for the quarter compared with 2008.

Mr Kellner said the industry was still facing "significant challenges."

He added: "While the unit revenue decline appears to be bottoming out, it is doing so at low levels and we must take aggressive steps to increase revenue and reduce costs.

"The most difficult changes will be the employee reductions that we are forced to make throughout the company."

Continental was granted anti-trust immunity by the US Department of transportation earlier this month for a transatlantic joint venture with members of the Star Alliance, which it is joining later this year.

www.continental.com