Continental Airlines Bucks Industry Trend and Reports 24th Consecutive Profitable Quarter

Continues to Distance Itself From Its Competitors



Apr 16, 2001, 01:00 ET from Continental Airlines, Inc.

    HOUSTON, April 16 /PRNewswire/ -- Continental Airlines (NYSE:   CAL) today
 reported first quarter net income of $9 million ($0.16 diluted earnings per
 share).  This marks the 24th consecutive profitable quarter for Continental
 and exceeds the First Call consensus of $0.05 diluted earnings per share.
 Continental expects to be one of only two major U.S. carriers to post a profit
 in the first quarter.
     Continental managed to sustain its profitability and boost operating
 income 21 percent in the first quarter, in spite of the economic slowdown and
 continued high fuel prices.
     "Our performance once again proves that all airlines are not alike," said
 Gordon Bethune, Continental Airlines' chairman and chief executive officer.
 "High employee morale, coupled with consistently good service, provided us
 with the necessary edge to maintain our profitability."
 
                        First Quarter Operating Results
     First quarter passenger revenue rose eight percent to a record
 $2.3 billion.  All geographic markets recorded year-over-year increases in
 revenue per available seat mile (RASM) in the first quarter.  Overall,
 capacity grew by a modest two percent.  Statistics by geographic market are
 shown below:
 
 
                   First Quarter 2001 vs. First Quarter 2000
 
                          Passenger Revenue         ASMs         RASM
     Domestic                    5.7%               4.1%         1.5%
     Latin America              14.0%               2.2%        11.6%
     Transatlantic               3.4%             (5.0)%         8.8%
     Pacific                    15.0%               5.3%         9.2%
 
     Continental continued to enjoy domestic yield and length-of-haul adjusted
 RASM premiums to the industry.
     Operationally, Continental had another great quarter.  The airline
 finished near the top of the industry in completion factor and on-time
 performance as measured by the U.S. Department of Transportation.  This
 continues the trend established in 2000 when Continental had the best on-time
 performance of any major U.S. carrier, having ended the year a full
 5.5 percentage points better than the industry average.
     During the quarter, the company won several honors, including Airline of
 the Year 2001 by Air Transport World magazine.  Continental is the only
 airline among the more than 300 airlines in the world to receive this coveted
 distinction twice in five years.  In addition, Continental took top honors in
 five categories at the OAG (Official Airline Guide) Airline of the Year Awards
 2001, and was again named the No. 2 Most Admired U.S. Airline by FORTUNE
 magazine.
     "Thanks to the hard work of the professional men and women at Continental,
 our completion factor was significantly better than the industry," said Greg
 Brenneman, Continental's president and chief operating officer.  "The revenue
 generated from the higher completion factor allowed us to post a profit while
 our competitors lost money."
     The positive growth trend in online bookings continued in the first
 quarter with a 65 percent increase year-over-year.  In addition, E-ticket
 sales now represent 60 percent of total sales, compared to 52 percent in the
 first quarter of 2000.
     Also in the first quarter, the airline made aviation history with the
 launch of the first-ever daily nonstop service between New York/Newark and
 Hong Kong.
 
                        First Quarter Financial Results
     Continental's cost per available seat mile in the first quarter was
 1.9 percent higher holding fuel rate constant, and 2.4 percent higher
 including the effect of fuel rate increases, as compared to the same period
 last year.  A three percent increase in fuel prices and a two percent increase
 in available seat miles were partially offset by a two percent decrease in
 fuel consumption, reflecting the fuel efficiency of Continental's newer jet
 fleet.  Other costs remained relatively constant on a per unit basis compared
 to the previous year as a result of the company's continued disciplined focus
 on eliminating non-value added costs.
     The company again ended the quarter with more than $1.0 billion in cash
 and short-term investments.
     During the first quarter, Continental obtained a 3-year $200 million
 credit facility to be used to finance purchase deposits on new Boeing aircraft
 to be delivered to the company over the next several years.
     Continental priced a public offering of $709 million of pass-through
 certificates on April 4th at an average interest rate of 6.7 percent
 (including hedges).  The proceeds will be used to finance the debt portion of
 the acquisition cost of 21 new Boeing aircraft scheduled to be delivered to
 the company from October 2001 to March 2002.
     In January, the company repurchased 6.7 million shares of its former
 Class A common stock held by Northwest Airlines for $450 million.  A portion
 of the purchase was funded with the net proceeds from the private placement of
 $250 million of convertible preferred securities, completed last November,
 with the remainder funded from the company's stock repurchase program.  Under
 the stock repurchase program, Continental has repurchased 32 million shares of
 its common stock for $1.4 billion.  As of March 31, 2001, Continental had
 $106 million remaining in its stock repurchase program.
     "Our employees' consistent focus on eliminating non-value added costs over
 the last six years paid big dividends in the quarter," said Larry Kellner,
 executive vice president and chief financial officer.
     Continental took delivery of three Boeing 767-200 and one 767-400 extended
 range aircraft in the first quarter.  The company's wholly-owned regional
 carrier Continental Express took delivery of ten new regional jets in the
 first quarter, including flying its 100th regional jet into operation.
     The company also celebrated its sixth consecutive year of profit sharing
 with its 55,000 employees, which totaled $98 million for 2000.  Continental
 also paid out $11 million in on-time performance bonuses and gave away eight
 Eddie Bauer Ford Explorers to employees for perfect attendance in the first
 quarter.  In recognition of the company's independence from Northwest
 Airlines, Continental also paid $5 million in bonuses to all employees to
 celebrate the event.
 
                              Corporate Background
     Continental Airlines is the fifth largest airline in the U.S., offering
 more than 2,200 departures daily to 133 domestic and 92 international
 destinations.  Operating hubs in Newark, Houston, Cleveland and Guam,
 Continental (www.continental.com) serves more international cities than any
 other U.S. carrier, including extensive service throughout the Americas,
 Europe and Asia.
     Continental Airlines will conduct a regular quarterly telephone briefing
 today to discuss these results with the financial community at 9:30 a.m.
 CDT/10:30 a.m. EDT.  To listen to a live broadcast of this briefing via the
 World Wide Web, go to www.continental.com/corporate.
 
                             -- tables attached --
 
 
                  CONTINENTAL AIRLINES, INC. AND SUBSIDIARIES
 
      FINANCIAL SUMMARY
      (In millions of dollars, except per share data)
      (Unaudited)
 
                                                                        %
                            Three Months Ended  Three Months Ended  Increase/
                               March 31, 2001      March 31, 2000   (Decrease)
 
      Operating Revenue:
        Passenger                   $2,306              $2,137         7.9 %
        Cargo and mail                  88                  84         4.8 %
        Other                           57                  56         1.8 %
                                     2,451               2,277         7.6 %
 
      Operating Expenses:
        Wages, salaries and
         related costs                 758                 672        12.8 %
        Aircraft fuel                  345                 334         3.3 %
        Aircraft rentals               214                 206         3.9 %
        Maintenance, materials
         and repairs                   160                 159         0.6 %
        Landing fees and other rentals 141                 129         9.3 %
        Reservations and sales         128                 115        11.3 %
        Commissions                    115                 133       (13.5)%
        Depreciation and amortization  105                  95        10.5 %
        Passenger servicing             91                  85         7.1 %
        Other                          318                 286        11.2 %
                                     2,375               2,214         7.3 %
 
      Operating Income                  76                  63        20.6 %
 
      Nonoperating Income (Expense):
        Net interest expense           (42)                (30)       40.0 %
        Other, net                     (15)                (10)       50.0 %
                                       (57)                (40)       42.5 %
 
      Income before Income Taxes        19                  23       (17.4)%
      Income Tax Provision              (8)                 (9)      (11.1)%
      Distributions on Preferred
       Securities of Trust,
       net of tax                       (2)                ---          NM
      Net Income                   $     9             $    14       (35.7)%
 
      Basic Earnings per Share     $  0.17             $  0.21       (19.0)%
 
      Diluted Earnings per Share   $  0.16             $  0.21       (23.8)%
 
      Shares used for Computation:
        Basic                         54.9                63.4       (13.4)%
        Diluted                       56.4                64.2       (12.1)%
 
 
                  CONTINENTAL AIRLINES, INC. AND SUBSIDIARIES
 
      STATISTICS (jet operations only) (A)
 
                                       Three Months                     %
                                      Ended March 31,               Increase/
                                   2001             2000           (Decrease)
 
      Enplanements (thousands)     11,220           11,201            0.2 %
      Revenue passenger miles
       (millions)                  15,114           15,005            0.7 %
      Available seat miles
       (millions)                  21,459           20,951            2.4 %
      Cargo ton miles (millions)      253              265           (4.5)%
      Passenger load factor          70.4%            71.6%          (1.2) pts.
      Breakeven passenger
       load factor                   65.0%            68.2%          (3.2) pts.
      Passenger revenue per
       available seat mile           9.76 cents       9.33 cents      4.6 %
      Total revenue per available
       seat mile                    10.60 cents      10.13 cents      4.6 %
      Cost per available seat mile   9.91 cents       9.68 cents      2.4 %
      Average yield per revenue
       passenger mile               13.86 cents      13.03 cents      6.4 %
      Average price per gallon of
       fuel, excluding fuel taxes   85.58 cents      82.89 cents      3.2 %
      Average price per gallon of
       fuel, including fuel taxes   90.32 cents      87.15 cents      3.6 %
      Fuel gallons consumed
       (millions)                     369              377           (2.1)%
      Actual aircraft in fleet
       at end of period               375              364            3.0 %
      Average stage length          1,164            1,131            2.9 %
 
     Continental has entered into block space arrangements with certain other
     carriers whereby one or both of the carriers is obligated to purchase
     capacity on the other carrier.  The table above excludes the statistics
     for the capacity that was purchased by another carrier and includes the
     statistics for the capacity that was operated by other carriers but
     purchased by Continental.
 
     (A)  Excludes regional jets operated by Continental Express.
 
 

SOURCE Continental Airlines, Inc.
    HOUSTON, April 16 /PRNewswire/ -- Continental Airlines (NYSE:   CAL) today
 reported first quarter net income of $9 million ($0.16 diluted earnings per
 share).  This marks the 24th consecutive profitable quarter for Continental
 and exceeds the First Call consensus of $0.05 diluted earnings per share.
 Continental expects to be one of only two major U.S. carriers to post a profit
 in the first quarter.
     Continental managed to sustain its profitability and boost operating
 income 21 percent in the first quarter, in spite of the economic slowdown and
 continued high fuel prices.
     "Our performance once again proves that all airlines are not alike," said
 Gordon Bethune, Continental Airlines' chairman and chief executive officer.
 "High employee morale, coupled with consistently good service, provided us
 with the necessary edge to maintain our profitability."
 
                        First Quarter Operating Results
     First quarter passenger revenue rose eight percent to a record
 $2.3 billion.  All geographic markets recorded year-over-year increases in
 revenue per available seat mile (RASM) in the first quarter.  Overall,
 capacity grew by a modest two percent.  Statistics by geographic market are
 shown below:
 
 
                   First Quarter 2001 vs. First Quarter 2000
 
                          Passenger Revenue         ASMs         RASM
     Domestic                    5.7%               4.1%         1.5%
     Latin America              14.0%               2.2%        11.6%
     Transatlantic               3.4%             (5.0)%         8.8%
     Pacific                    15.0%               5.3%         9.2%
 
     Continental continued to enjoy domestic yield and length-of-haul adjusted
 RASM premiums to the industry.
     Operationally, Continental had another great quarter.  The airline
 finished near the top of the industry in completion factor and on-time
 performance as measured by the U.S. Department of Transportation.  This
 continues the trend established in 2000 when Continental had the best on-time
 performance of any major U.S. carrier, having ended the year a full
 5.5 percentage points better than the industry average.
     During the quarter, the company won several honors, including Airline of
 the Year 2001 by Air Transport World magazine.  Continental is the only
 airline among the more than 300 airlines in the world to receive this coveted
 distinction twice in five years.  In addition, Continental took top honors in
 five categories at the OAG (Official Airline Guide) Airline of the Year Awards
 2001, and was again named the No. 2 Most Admired U.S. Airline by FORTUNE
 magazine.
     "Thanks to the hard work of the professional men and women at Continental,
 our completion factor was significantly better than the industry," said Greg
 Brenneman, Continental's president and chief operating officer.  "The revenue
 generated from the higher completion factor allowed us to post a profit while
 our competitors lost money."
     The positive growth trend in online bookings continued in the first
 quarter with a 65 percent increase year-over-year.  In addition, E-ticket
 sales now represent 60 percent of total sales, compared to 52 percent in the
 first quarter of 2000.
     Also in the first quarter, the airline made aviation history with the
 launch of the first-ever daily nonstop service between New York/Newark and
 Hong Kong.
 
                        First Quarter Financial Results
     Continental's cost per available seat mile in the first quarter was
 1.9 percent higher holding fuel rate constant, and 2.4 percent higher
 including the effect of fuel rate increases, as compared to the same period
 last year.  A three percent increase in fuel prices and a two percent increase
 in available seat miles were partially offset by a two percent decrease in
 fuel consumption, reflecting the fuel efficiency of Continental's newer jet
 fleet.  Other costs remained relatively constant on a per unit basis compared
 to the previous year as a result of the company's continued disciplined focus
 on eliminating non-value added costs.
     The company again ended the quarter with more than $1.0 billion in cash
 and short-term investments.
     During the first quarter, Continental obtained a 3-year $200 million
 credit facility to be used to finance purchase deposits on new Boeing aircraft
 to be delivered to the company over the next several years.
     Continental priced a public offering of $709 million of pass-through
 certificates on April 4th at an average interest rate of 6.7 percent
 (including hedges).  The proceeds will be used to finance the debt portion of
 the acquisition cost of 21 new Boeing aircraft scheduled to be delivered to
 the company from October 2001 to March 2002.
     In January, the company repurchased 6.7 million shares of its former
 Class A common stock held by Northwest Airlines for $450 million.  A portion
 of the purchase was funded with the net proceeds from the private placement of
 $250 million of convertible preferred securities, completed last November,
 with the remainder funded from the company's stock repurchase program.  Under
 the stock repurchase program, Continental has repurchased 32 million shares of
 its common stock for $1.4 billion.  As of March 31, 2001, Continental had
 $106 million remaining in its stock repurchase program.
     "Our employees' consistent focus on eliminating non-value added costs over
 the last six years paid big dividends in the quarter," said Larry Kellner,
 executive vice president and chief financial officer.
     Continental took delivery of three Boeing 767-200 and one 767-400 extended
 range aircraft in the first quarter.  The company's wholly-owned regional
 carrier Continental Express took delivery of ten new regional jets in the
 first quarter, including flying its 100th regional jet into operation.
     The company also celebrated its sixth consecutive year of profit sharing
 with its 55,000 employees, which totaled $98 million for 2000.  Continental
 also paid out $11 million in on-time performance bonuses and gave away eight
 Eddie Bauer Ford Explorers to employees for perfect attendance in the first
 quarter.  In recognition of the company's independence from Northwest
 Airlines, Continental also paid $5 million in bonuses to all employees to
 celebrate the event.
 
                              Corporate Background
     Continental Airlines is the fifth largest airline in the U.S., offering
 more than 2,200 departures daily to 133 domestic and 92 international
 destinations.  Operating hubs in Newark, Houston, Cleveland and Guam,
 Continental (www.continental.com) serves more international cities than any
 other U.S. carrier, including extensive service throughout the Americas,
 Europe and Asia.
     Continental Airlines will conduct a regular quarterly telephone briefing
 today to discuss these results with the financial community at 9:30 a.m.
 CDT/10:30 a.m. EDT.  To listen to a live broadcast of this briefing via the
 World Wide Web, go to www.continental.com/corporate.
 
                             -- tables attached --
 
 
                  CONTINENTAL AIRLINES, INC. AND SUBSIDIARIES
 
      FINANCIAL SUMMARY
      (In millions of dollars, except per share data)
      (Unaudited)
 
                                                                        %
                            Three Months Ended  Three Months Ended  Increase/
                               March 31, 2001      March 31, 2000   (Decrease)
 
      Operating Revenue:
        Passenger                   $2,306              $2,137         7.9 %
        Cargo and mail                  88                  84         4.8 %
        Other                           57                  56         1.8 %
                                     2,451               2,277         7.6 %
 
      Operating Expenses:
        Wages, salaries and
         related costs                 758                 672        12.8 %
        Aircraft fuel                  345                 334         3.3 %
        Aircraft rentals               214                 206         3.9 %
        Maintenance, materials
         and repairs                   160                 159         0.6 %
        Landing fees and other rentals 141                 129         9.3 %
        Reservations and sales         128                 115        11.3 %
        Commissions                    115                 133       (13.5)%
        Depreciation and amortization  105                  95        10.5 %
        Passenger servicing             91                  85         7.1 %
        Other                          318                 286        11.2 %
                                     2,375               2,214         7.3 %
 
      Operating Income                  76                  63        20.6 %
 
      Nonoperating Income (Expense):
        Net interest expense           (42)                (30)       40.0 %
        Other, net                     (15)                (10)       50.0 %
                                       (57)                (40)       42.5 %
 
      Income before Income Taxes        19                  23       (17.4)%
      Income Tax Provision              (8)                 (9)      (11.1)%
      Distributions on Preferred
       Securities of Trust,
       net of tax                       (2)                ---          NM
      Net Income                   $     9             $    14       (35.7)%
 
      Basic Earnings per Share     $  0.17             $  0.21       (19.0)%
 
      Diluted Earnings per Share   $  0.16             $  0.21       (23.8)%
 
      Shares used for Computation:
        Basic                         54.9                63.4       (13.4)%
        Diluted                       56.4                64.2       (12.1)%
 
 
                  CONTINENTAL AIRLINES, INC. AND SUBSIDIARIES
 
      STATISTICS (jet operations only) (A)
 
                                       Three Months                     %
                                      Ended March 31,               Increase/
                                   2001             2000           (Decrease)
 
      Enplanements (thousands)     11,220           11,201            0.2 %
      Revenue passenger miles
       (millions)                  15,114           15,005            0.7 %
      Available seat miles
       (millions)                  21,459           20,951            2.4 %
      Cargo ton miles (millions)      253              265           (4.5)%
      Passenger load factor          70.4%            71.6%          (1.2) pts.
      Breakeven passenger
       load factor                   65.0%            68.2%          (3.2) pts.
      Passenger revenue per
       available seat mile           9.76 cents       9.33 cents      4.6 %
      Total revenue per available
       seat mile                    10.60 cents      10.13 cents      4.6 %
      Cost per available seat mile   9.91 cents       9.68 cents      2.4 %
      Average yield per revenue
       passenger mile               13.86 cents      13.03 cents      6.4 %
      Average price per gallon of
       fuel, excluding fuel taxes   85.58 cents      82.89 cents      3.2 %
      Average price per gallon of
       fuel, including fuel taxes   90.32 cents      87.15 cents      3.6 %
      Fuel gallons consumed
       (millions)                     369              377           (2.1)%
      Actual aircraft in fleet
       at end of period               375              364            3.0 %
      Average stage length          1,164            1,131            2.9 %
 
     Continental has entered into block space arrangements with certain other
     carriers whereby one or both of the carriers is obligated to purchase
     capacity on the other carrier.  The table above excludes the statistics
     for the capacity that was purchased by another carrier and includes the
     statistics for the capacity that was operated by other carriers but
     purchased by Continental.
 
     (A)  Excludes regional jets operated by Continental Express.
 
 SOURCE  Continental Airlines, Inc.

RELATED LINKS

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