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Continental Airlines plans to further grow ancillary revenue streams in 2010

10-Mar-2010 1:52 PM

Continental Airlines Chairman, President and CEO, Jeff Smisek, at the JP Morgan Aviation, Transportation & Defense Conference, announced (09-Mar-2010) the following details regarding its operations:

  • 2010 priorities: Outlined the following as its 2010 priorities:
    • "Star Alliance and joint ventures";
    • "Increase ancillary revenue through customer choice";
    • "Invest in our product to attract and retain customers";
    • "Emphasize efficiency and customer self-service";
    • "Earn a paycheck";
  • Ancillary revenues: Plans to further grow its ancillary revenue streams through product unbundling (including baggage fees, booking fees and in-flight amenities) and product enhancements (including DOD upgrades, preferred coach seatings, premium wines and liquors and PetSafe, with "many others to come". The carrier added that it expects baggage revenues to increase 37% year-on-year in 2010 to over USD350 million. However, second checked baggage is down 65% due to the fees, meaning more room on the aircraft for cargo (Reuters, 09-Mar-2010);
  • Regional fleet: Stated the carrier is not happy with regional fleet (Reuters, 09-Mar-2010);

Continental Executive VP and CFO, Zane Rowe, added the following commentary:

  • CASM/ASM forecasts: Expects CASM to increase by 1-2% in 2010, with capacity (ASMs) expected to increase by the same degree;
  • Fleet: Ended 2009 with 337 aircraft, with a net addition of ten aircraft planned for 2010, for a 347 aircraft fleet by the end of 2010;
  • Cash: Expects to end 1Q2010 with USD3.1 billion in unrestricted cash and cash equivalents. [more]