Continental Hangs On Despite Losses
by: Jim Bell, July 17, 2008 10:07:05 am
A statement from Continental says record high fuel prices, combined with weakening economic conditions and a weak dollar have resulted in the worst financial environment for the airline industry since 9/11.
Even though Continental's total revenue of $4 billion dollars was up 9 percent from the second quarter of last year, it couldn't keep up with fuel prices. Overall, Continental's bottom line shows a second quarter loss of 3 million dollars, or three cents a share.
Wall Street analysts were expecting Continental to lose 52 cents a share.
Officials say they lost money despite carrying more people, and despite higher fares it was forced to charge because of rising fuel costs.
The airline has plans to cut costs to the bone to cope with fuel prices. It will start cutting about 3000 jobs later this summer and 67 of its planes will be grounded.
Even so, Continental's balance sheet looks a lot better than those of its competitors: Delta and American Airlines. Both of which are reporting losses in excess of a billion dollars each.
Jim Bell, KUHF Houston Public Radio News.