Continental posts strong growth

20th Jul 2006

Continental Airlines has reported second quarter 2006 net income of $198 million, a significant improvement over its
second quarter 2005 net income of $100 million.Operating income in the second quarter of 2006 was $244 million, more
than double that of the second quarter of 2005, in spite of fuel price
increases costing over $200 million and including a $60 million accrual
for employee profit sharing.

“Our plan is working and as a result, everyone wins,” said Larry
Kellner, chairman and chief executive officer. “Employees win with
profit sharing and stock option gains, customers win with award winning
service as reflected by the J.D. Power award and stockholders win with

During the quarter, ExpressJet notified Continental that ExpressJet
intends to retain all 69 regional jet aircraft covered by Continental’s
previously announced withdrawal notice under the capacity purchase
agreement with ExpressJet. Continental expects to replace between 40 and
50 of those regional jets, and has no current plans to replace the
remainder. Continental is in advanced discussions to have an operator
provide the capacity that it has chosen to replace, at competitive rates
under a capacity purchase arrangement.

Other than the 40 to 50 regional jet aircraft that Continental expects a
third party to acquire and operate to partially replace the 69 withdrawn
ExpressJet aircraft, and two Boeing 777 aircraft that Continental will
take delivery of in early 2007, Continental will not take any new
aircraft deliveries in 2007. As a result, the carrier anticipates
growing its mainline capacity approximately 5 percent and its
consolidated capacity between 3 percent and 4 percent in 2007.

“Our co-workers continue to deliver the best product in the business,”
said Jeff Smisek, president. “As we continue to grow, we are also adding
solid year-over-year unit revenue gains, driving excellent revenue


“After five years of challenges and hard work, it’s great to see a
pay-off for everyone’s efforts,” said Jeff Misner, executive vice
president and chief financial officer. “But, even with all the progress
made, we must continue our focus on eliminating unnecessary costs.”


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