Continental Airlines’ yields and cash outlook improves

Continental Airlines reported an encouraging set of traffic results for November, with record mainline load factors, smaller falls in yields and an improving cash outlook, reflecting a steady improvement in the US airline operating environment.

In Nov-2009, Continental recorded a consolidated traffic (RPM) increase of 2.9% and a capacity decrease (ASM) of 1.2% year-on-year. Consolidated (mainline plus regional) load factor reached 80.5%, up 3.2 ppts year-on-year and the airline achieved a record mainline load factor of 81.1%, up 3.3 points. The carrier reported a domestic mainline November load factor of 83.3%, 2.7 points above the November 2008 domestic mainline load factor, and a record international mainline load factor of 78.8%, 3.8 points above November 2008.

Best RASM performance since Feb-2009

For November 2009, consolidated passenger revenue per available seat mile (RASM) is estimated to have decreased between 7.0 and 9.0% compared to November 2008, while mainline RASM is estimated to have decreased between 8.0 and 10.0%. It follows a 14.2% reduction in consolidated RASM in Oct-2009. Continental stated the ranges of the year-over-year RASM estimates for the month of November are “wider than usual, due to processing delays associated with the transition to Star Alliance”.

Continental Airlines consolidated PRASM (US cents per ASM): Nov-2008 to Nov-2009

Cash burn slowing

Furthermore, Continental stated it anticipates ending 2009 with an unrestricted cash, cash equivalents and short-term investments balance of approximately USD2.5 billion – an improvement from the USD2.4 billion estimated as part of its third quarter earnings announcement on 21-Oct-2009. Continental ended 3Q2009 with an unrestricted cash balance of approximately USD2.55 billion, down from USD2.77 billion at 30-Jun-2009.

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