Sun, Oct 12, 2008
Rising Fuel Costs And Slipping Load Factor Taking A Toll
In a filing with the Securities and
Exchange Commission Thursday, Houston-based Continental Airlines
Inc. announced it would take $91 million in special charges in the
third quarter of 2008, due in part to capacity cuts and severance
costs.
The Associated Press reports Continental said it would record a
$27 million adjustment for increased revenue and lower liability
for its frequent-flier program was related to new fees on
passengers who redeemed awards within 20 days of travel.
Severance and medical coverage for employees who took buyouts
and leaves of absence accounts for another $33 million charge.
Continental also said it would take a noncash settlement charge of
$8 million for pension payments to retired pilots.
Other charges include $12 million for future lease costs on
grounded jets, an $18 million write-off to move all London flights
from Gatwick to Heathrow Airport, and $9 million to reimburse
ExpressJet, an operator of feeder flights for Continental, for
grounded planes, the AP said.
Despite reducing its ranks by 3,000 employees and grounding
flights to decrease capacity, high fuel costs and a weakening
economy have prompted Continental to announce it would likely incur
more charges in future quarters to ground additional aircraft.
Continental Airlines said it will hold its third quarter
financial results conference call on Thursday, October 16 at 10:30
AM ET, and a live, listen-only webcast of the conference call will
be available at continental.com in the "Investor Relations" section
under the "About Continental" menu.
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