Continental Airlines today reported second quarter 2006 net income of $198 million, a significant improvement over its second quarter 2005 net income of $100 million. Excluding special charges, Continental recorded net income of $208 million.
Operating income in the second quarter of 2006 was $244 million, more than double that of the second quarter of 2005, in spite of fuel price increases costing over $200 million and including a $60 million accrual for employee profit sharing.
"Our plan is working and as a result, everyone wins," said Larry Kellner, chairman and chief executive officer. "Employees win with profit sharing and stock option gains, customers win with award winning service as reflected by a J.D. Power award and stockholders win with profitability."
During the quarter, ExpressJet notified Continental that ExpressJet intends to retain all 69 regional jet aircraft covered by Continental's previously announced withdrawal notice under the capacity purchase agreement with ExpressJet. Continental expects to replace between 40 and 50 of those regional jets, and has no current plans to replace the remainder. Continental is in advanced discussions to have an operator provide the capacity that it has chosen to replace, at competitive rates under a capacity purchase arrangement.
Other than the 40 to 50 regional jet aircraft that Continental expects a third party to acquire and operate to partially replace the 69 withdrawn ExpressJet aircraft, and two Boeing 777 aircraft that Continental will take delivery of in early 2007, Continental will not take any new aircraft deliveries in 2007. As a result, the carrier anticipates growing its mainline capacity approximately 5 percent and its consolidated capacity between 3 percent and 4 percent in 2007.
Passenger revenue for the quarter increased 23.1 percent ($606 million) over the same period in 2005, to $3.2 billion, with double digit percentage growth in each mainline geographic region and in regional jet operations. Additional traffic, both domestic and international, and several fare increases produced significantly higher revenue for the company. Consolidated passenger revenue per available seat mile (RASM) for the quarter increased 11.0 percent year-over-year due to increased yields and record load factors.
