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Hurricane, fuel costs push Continental to $236 million loss
Posted by Alison Grant/Plain Dealer reporter October 16, 2008 11:04AM
Categories: Aviation, Breaking News
Jet fuel costs and the expense of dealing with Hurricane Ike sent Continental Airlines' earnings to a loss of $236 million in the third quarter.
Continental said $91 million of the decline was due to special items, including the hurricane that battered the Gulf Coast in September.
Continental canceled flights across the country when the storm forced the closing of Bush Intercontinental Airport in Houston, Continental's base. The airline's headquarters staff transferred operations to a Cold War-era bunker 50 miles north of the city.
Continental, which operates a hub in Cleveland, said Thursday that high fuel prices continued to depress earnings during the third quarter. Gulf Coast jet fuel averaged $3.49 a gallon, compared with $2.16 a gallon in the third quarter of 2007. Total fuel costs for its mainline jets increased $606 million in the third quarter compared with a year earlier.
Total revenue for the quarter was $4.2 billion, an increase of 8.8 percent -- $336 million -- over the same period in 2007. Passenger revenue was up 7.1 percent -- $249 million -- from the 2007 third quarter. It included a $27 million increase in revenue related to the company's frequent flyer costs.
"We had solid revenue performance in an exceedingly difficult operating environment," President and Chief Operating Officer Jeff Smisak said in a written statement. "Despite four hurricanes and two tropical storms, our team took care of our customers and delivered on the revenue."
Continental said that consolidated revenue passenger miles fell 2.3 percent year to year. The weak economy and increased ticket prices have softened business for other carriers, too.
Continental also announced that it put off until 2010 delivery of two Boeing 777s originally scheduled for delivery next year. The carrier also reached an agreement in principle with Boeing to postpone until 2011 and beyond delivery of 16 narrow-body aircraft that it had planned to receive in 2009 and 2010.
Continental said it ended the third quarter with about $2.9 billion in unrestricted cash, cash equivalents and short-term investments. |
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People in the Northern Leeward Islands are bracing for a strike tonight and tomorrow by Hurricane Omar. The hurricane is now a Category 1 storm with top sustained winds of 85 mph. But forecasters at the National Hurricane Center expect the storm will grow to Cat. 2 status before landfall, with top winds of at least 96 mph on the Saffir-Simpson Scale.
"It also isn't out of the question that Omar could achieve major hurricane status (Cat. 3, 111 mph) just before the cyclone reaches the northern Leeward Islands," forecasters said today. But drier air from the northwest could still intrude and weaken the storm before landfall.
Here's AccuWeather.com's take on the storm.
Omar sprang up yesterday in the Eastern Caribbean just north of the Dutch Antilles, and pummeled those islands - Aruba. Bonaire and Curacao - with heavy winds and rain.
Now forecasters have posted hurricane warnings for the U.S. Virgin Islands and the small islands east of Puerto Rico - Vieques and Culebra. Also under warnings now are St. Martin/Maarten, Saba, St. Eustatius, St. Barthelemy, the British Virgin Islands, Anguilla, St. Kitts and Nevis.
Puerto Rico itself is under a Hurricane Watch and Tropical Storm Warnings. TS warnings are also posted for Antigua, Barbuda and Montserrat.
Omar this morning was centered 235 miles southwest of St. Croix in the U.S. Virgin Islands. It was moving to the northeast at about 9 mph. Hurricane force winds were limited to a fairly small radius - just 15 miles from the center. But communities in its path can expect tropical-storm-force winds 115 miles from the center. Five to 10 inches of rain are also possible in Puerto Rico and the other islands, which may trigger flash floods and mudslides.
Here is the latest advisory. |
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CHARLOTTE AMALIE, U.S. Virgin Islands (AP) — Forecasters say Omar has reached hurricane strength with top winds of 75 mph as it menaces Puerto Rico and the U.S. Virgin Islands.
A hurricane warning has been issued for the U.S. Virgin islands and the islands of Vieques and Culebra. Hurricane warnings have also been issued by the governments of St. Martin, the British Virgin Islands, St. Kitts and Nevis and other islands.
A hurricane watch and a tropical storm warning remain in effect for Puerto Rico, and a hurricane warning could be required there Wednesday morning.
At 11 p.m., the storm was centered 315 miles (505 km) south-southwest of San Juan, Puerto Rico, and was moving northeast at 6 mph (9 km/hr.) |
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