Continental Airlines (NYSE: CAL) today reported a record systemwide March load factor of 79.4 percent, 4.1 points above last year's load factor. Continental reported a record domestic March load factor of 77.5 percent and a record international March load factor of 82.8 percent. Easter falling in March this year, in contrast to mid-April in 2001, contributed to the load factor increases over March 2001.
Continental reported an on-time arrival rate of 84.8 percent and a completion factor of 99.9 percent for March 2002.
In March 2002, Continental flew 5.4 billion revenue passenger miles (RPMs) systemwide and 6.7 billion available seat miles (ASMs), resulting in a traffic decrease of 5.4 percent and a capacity decrease of 10.4 percent versus March 2001. Domestic traffic was 3.3 billion RPMs, down 4.9 percent from March 2001, and domestic capacity was 4.2 billion ASMs, down 8.8 percent from March last year.
Lower year-over-year yields, mitigated somewhat by higher load factors, resulted in a decrease in estimated systemwide passenger revenue per available seat mile (RASM) of between 6 and 8 percent for March 2002, as compared to March 2001. For February 2002, RASM declined 11.0 percent as compared to February 2001. Preliminary data indicates that the company achieved profitability for the first time since September 11 during the month of March. The company expects, however, to report a significant loss
for the first quarter of 2002.
Continental expects to report that it ended the first quarter with a cash balance of approximately $1.2 billion, which includes $147 million of restricted cash related to a pre-funded aircraft financing.
"We are pleased that we achieved profitability in March but we continue to be concerned about higher fuel prices and RASM weakness due to capacity increases by many of our competitors," said Jeff Misner, Sr. Vice President and Chief Financial Officer.
While recent monthly RASM performance trends have improved, those trends will need to continue to improve for Continental to attain profitability in the second quarter of 2002. The estimated year-over-year RASM needed to break even for the second quarter, assuming successful completion of the ExpressJet initial public offering, is a decrease of approximately 1 percent or less on a year-over-year basis for the full quarter, or a year-over-year RASM decrease of 8 percent in April, an increase of 2 percent in May and an increase of 4 percent in June. These estimates are based on an expected increase in CASM of two percent holding fuel rate constant and assuming an average fuel price of 71 cents. Based on current fuel price and revenue trends, the company's ability to achieve profitability in the second quarter will be challenging.
Continental said it expects to receive a federal income tax refund of approximately $39 million in the second quarter. This amount represents certain alternative minimum tax payments previously paid by Continental and due to be refunded under recent legislation.
Continental Express, a wholly owned subsidiary of Continental Airlines, reported a load factor of 63.1 percent for March 2002, 0.6 points above last year's March load factor. Continental Express flew 315.7 million RPMs and 500.2 million ASMs in March 2002, resulting in a traffic increase of 13.7 percent and a capacity increase of 12.6 percent
versus March 2001.
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