Continental Airlines (NYSE: CAL) today reported a March 2003 systemwide mainline jet load factor of 71.6 percent, 7.9 points below last year`s March load factor. A significant portion of the decline in load factor was due to the war in Iraq. The March 2003 domestic mainline jet load factor was 74.3 percent and the international mainline jet load factor was 67.6 percent.
Since the ultimatum was issued to Iraq on March 17, traffic, compared to our March forecast, declined as follows:
Domestic (3)% /// Transatlantic (10)% /// Pacific (16)% /// Latin America (6)% /// System (5)%
Continental previously announced temporary capacity reductions on certain Transatlantic and Pacific routes in response to the lower demand caused by worldwide uncertainties.
Continental also reported today that it will record an after-tax special charge of $41 million ($65 million pre-tax) in March 2003 primarily related to the impairment of its MD-80 fleet and spare parts associated with grounded aircraft.
The airline reported a domestic on-time arrival rate of 82.7 percent and a systemwide completion factor of 99.4 percent for its mainline jet operations in March 2003.
In March 2003, Continental flew 4.9 billion mainline jet revenue passenger miles (RPMs) and 6.9 billion mainline jet available seat miles (ASMs) systemwide, resulting in a traffic decrease of 8.3 percent and a capacity increase of 1.9 percent as compared to March 2002. Domestic mainline jet traffic was 3.0 billion RPMs in March 2003, down 7.6 percent from March 2002, and March 2003 domestic mainline jet capacity was 4.1 billion ASMs, down 3.7 percent from March 2002.
Systemwide March 2003 mainline jet passenger revenue per available seat mile (RASM) is estimated to have decreased between 11 and 13 percent compared to March 2002. The carrier estimates that approximately 6 to 8 points of the decline occurred due to customers` pre-war reaction to the Iraqi situation and the movement of Easter from March to April. An additional 5 points of the decline appeared to result from the fall in demand following the start of the war. For February 2003, RASM decreased 0.4 percent as compared to February 2002.
Continental ended the first quarter with a cash and short-term investment balance of approximately $1.18 billion. Continental has hedged over 80 percent of its projected second quarter fuel volume with caps at an average weighted strike price of about $33 per barrel of crude oil.
ExpressJet Airlines, a subsidiary of Continental Airlines doing business as Continental Express, separately reported a record March load factor of 64.2 percent for March 2003, 1.1 points above last year`s March load factor. ExpressJet flew 419.5 million RPMs and 653.9 million ASMs in March 2003, resulting in a traffic increase of 32.9 percent and a capacity increase of 30.7 percent versus March 2002.