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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

 

Date of Report (Date of earliest event reported):

July 1, 2004

 

 

 

CONTINENTAL AIRLINES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

1-10323

74-2099724

(State or other jurisdiction

(Commission File Number)

(IRS Employer

of incorporation)

  

Identification No.)

 

1600 Smith Street, Dept. HQSEO, Houston, Texas

77002

(Address of principal executive offices)

(Zip Code)

(713) 324-2950

(Registrant's telephone number, including area code)

Item 5. Other Events.

On July 1, 2004, we issued a press release announcing our June performance and our estimated consolidated breakeven load factor for July. The press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 7. Financial Statements and Exhibits.

    1. Exhibits
 

99.1

Press Release for June Performance

 

 

SIGNATURE

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, Continental Airlines, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

CONTINENTAL AIRLINES, INC.

 

 

July 1, 2004

By   /s/ Jennifer L. Vogel      
 

        Jennifer L. Vogel
 

        Senior Vice President, General Counsel
        and Secretary

 

 

EXHIBIT INDEX

99.1

Press Release for June Performance

 

 
News Release

EXHIBIT 99.1

News Release

Contact: Corporate Communications

Houston: 713.324.5080

Email: corpcomm@coair.com

News archive: continental.com/news/ Address: P.O. Box 4607, Houston, TX 77210-4607

 

CONTINENTAL AIRLINES REPORTS JUNE 2004

OPERATIONAL PERFORMANCE

HOUSTON, July 1, 2004 - Continental Airlines (NYSE: CAL) today reported a June systemwide mainline load factor of 82.4 percent, 1.4 points above last year's June load factor. In addition, the airline had a June domestic mainline load factor of 82.6 percent, 0.8 points above June 2003, and an international mainline load factor of 82.2 percent, 2.5 points above June 2003. All three were operational records for June.

Despite 25 days of severe weather in Houston, Newark and Cleveland, Continental's hub cities, the carrier had very few cancellations and was able to record a systemwide mainline completion factor of 99.8 percent. However, due to the poor weather, Continental's on-time arrival rate fell to 68.1 percent for June.

In June 2004, Continental flew 6.0 billion mainline revenue passenger miles (RPMs) and 7.3 billion mainline available seat miles (ASMs) systemwide, resulting in a traffic increase of 12.2 percent and a capacity increase of 10.2 percent as compared to June 2003. Domestic mainline traffic was 3.4 billion RPMs in June 2004, up 3.6 percent from June 2003, and domestic mainline capacity was 4.2 billion ASMs, up 2.5 percent from June 2003.

Systemwide June 2004 mainline passenger revenue per available seat mile (RASM) is estimated to have increased between 0.5 and 1.5 percent compared to June 2003. For May 2004, RASM decreased 3.0 percent as compared to May 2003.

Continental ended the quarter with unrestricted cash and short-term investments of $1.69 billion. As a result of better revenue and cost performance than previously anticipated, the company expects its results for the quarter to be close to breakeven, excluding special items.

 

During the month, the Company recorded $10 million of special charges associated with the permanent grounding of MD-80 aircraft, bringing the total for the quarter to $30 million. The charge is associated with future rent and return obligations. Also, due to accumulated losses, effective in the second quarter of 2004, Continental has stopped recording income tax benefit on current and future book losses.

On June 28, Continental filed an election with the IRS to preserve the Company's ability to take advantage of deficit reduction contribution relief under the recently enacted Pension Funding Equity Act. Under the relief, Continental may reduce pension contributions otherwise due for 2004. The Company continues to evaluate the 2004 contribution to its pension plan and expects to make a decision regarding the funding by mid-September 2004.

Continental's regional operations (Continental Express) set a record June load factor of 77.0 percent, 3.5 points above last year's June load factor. Regional

RPMs were 680.4 million and regional ASMs were 883.5 million in June 2004, resulting in a traffic increase of 26.2 percent and a capacity increase of 20.4 percent versus June 2003.

Continental Airlines is the world's sixth-largest airline with more than 2,900 daily departures throughout the Americas, Europe and Asia. Continental serves 149 domestic and 119 international destinations - more than any other airline in the world - and nearly 200 additional points are served via codeshare partner airlines. With 41,000 mainline employees, the airline has hubs serving New York, Houston, Cleveland and Guam, and carries approximately 51 million passengers per year. In 2004, Continental has earned awards and critical acclaim for both its operation and its corporate culture. FORTUNE ranks Continental one of the 100 Best Companies to Work For in America, an honor it has earned for six consecutive years, and also ranks Continental as the top airline in its Most Admired Global Companies in 2004. The carrier won major awards at the 2004 OAG Airline of the Year Awards including "Airline of the Year," "Best Airline Based in North America" and "Best Executive/Business Class." For more compan y information, visit continental.com.

 

 

This press release contains forward-looking statements that are not limited to historical facts, but reflect the company's current beliefs, expectations or intentions regarding future events. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. For examples of such risks and uncertainties, please see the risk factors set forth in the company's 2003 10-K and its other securities filings, which identify important matters such as terrorist attacks, domestic and international economic conditions, the significant cost of aircraft fuel, labor costs, competition, regulatory matters and industry conditions, including the demand for air travel, the airline pricing environment and industry capacity decisions. The company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRELIMINARY TRAFFIC RESULTS

JUNE

  

2004   

2003   

Change   

REVENUE PASSENGER MILES (000)

    
 

Domestic

3,438,729

3,320,320

3.6  Percent
         
 

International

2,600,328

2,061,463

26.1  Percent
 

Transatlantic

1,320,498

1,028,803

28.4  Percent 
 

Latin America

760,696

677,951

12.2  Percent 
 

Pacific

519,133

354,710

46.4  Percent 
         
 

Mainline

6,039,057

5,381,783

12.2  Percent
         
 

Regional

680,388

538,936

26.2  Percent
         

AVAILABLE SEAT MILES (000)

    
 

Domestic

4,163,258

4,060,860

2.5  Percent
         
 

International

3,162,614

2,585,781

22.3  Percent
 

Transatlantic

1,539,753

1,205,885

27.7  Percent 
 

Latin America

1,001,672

878,904

14.0  Percent 
 

Pacific

621,189

500,992

24.0  Percent 
         
 

Mainline

7,325,872

6,646,641

10.2  Percent
         
 

Regional

883,506

733,730

20.4  Percent
         

PASSENGER LOAD FACTOR

    
 

Domestic

82.6 Percent

81.8 Percent

0.8  Points
         
 

International

82.2 Percent

79.7 Percent

2.5  Points
 

Transatlantic

85.8 Percent 

85.3 Percent 

0.5  Points 
 

Latin America

75.9 Percent 

77.1 Percent 

(1.2) Points 
 

Pacific

83.6 Percent 

70.8 Percent 

12.8  Points 
         
 

Mainline

82.4 Percent

81.0 Percent

1.4  Points
         
 

Regional

77.0 Percent

73.5 Percent

3.5  Points
         

CARGO REVENUE TON MILES (000)

    
 

Total

80,199

75,459

6.3  Percent

 

 

 

YEAR-TO-DATE

  

2004   

2003   

Change   

REVENUE PASSENGER MILES (000)

    
 

Domestic

18,429,465

17,288,300

6.6  Percent
         
 

International

13,114,181

10,660,463

23.0  Percent
 

Transatlantic

5,947,637

4,695,352

26.7  Percent 
 

Latin America

4,307,414

3,897,260

10.5  Percent 
 

Pacific

2,859,130

2,067,851

38.3  Percent 
         
 

Mainline

31,543,646

27,948,763

12.9  Percent
         
 

Regional

3,447,947

2,534,188

36.1  Percent
         

AVAILABLE SEAT MILES (000)

    
 

Domestic

24,497,953

23,131,287

5.9  Percent
         
 

International

17,329,371

15,116,912

14.6  Percent
 

Transatlantic

7,617,610

6,499,314

17.2  Percent 
 

Latin America

6,002,964

5,395,119

11.3  Percent 
 

Pacific

3,708,797

3,222,479

15.1  Percent 
         
 

Mainline

41,827,324

38,248,199

9.4  Percent
         
 

Regional

5,004,476

3,840,089

30.3  Percent
         

PASSENGER LOAD FACTOR

    
 

Domestic

75.2 Percent

74.7 Percent

0.5  Points
         
 

International

75.7 Percent

70.5 Percent

5.2  Points
 

Transatlantic

78.1 Percent 

72.2 Percent 

5.9  Points 
 

Latin America

71.8 Percent 

72.2 Percent 

(0.4) Points 
 

Pacific

77.1 Percent 

64.2 Percent 

12.9  Points 
         
 

Mainline

75.4 Percent

73.1 Percent

2.3  Points
         
 

Regional

68.9 Percent

66.0 Percent

2.9  Points
         

CARGO REVENUE TON MILES (000)

    
 

Total

498,927

458,558

8.8  Percent

 

 

 

 

PRELIMINARY OPERATIONAL AND FINANCIAL RESULTS

JUNE

  

2004 

2003 

Change  

On-Time Performance1

68.1%

81.4%

(13.3) Points

Completion Factor2

99.8%

99.9%

(0.1) Points
         

YEAR-TO-DATE

  

2004 

2003 

Change  

On-Time Performance1

77.1%

83.8%

(6.7) Points

Completion Factor2

99.6%

99.3%

0.3  Points
         

May 2004 consolidated breakeven load factor3,4

80.3  Percent

June 2004 estimated year-over-year RASM change

0.5-1.5  Percent

June 2004 estimated average price per gallon of fuel,

                       including fuel taxes


1.16 Dollars

June 2004 estimated consolidated breakeven load factor3,5

78 Percent

June 2004 actual consolidated load factor6

81.9 Percent

July 2004 estimated consolidated breakeven load factor3

78 Percent
 

YEAR-OVER-YEAR SYSTEMWIDE RASM

      
 

2003 vs. 2002

2003 vs. 2001

  

May

2.0 Percent

(4.3) Percent

  

June

0.3 Percent

(5.2) Percent

  

July

4.9 Percent

0.7  Percent

  

August

4.4 Percent

1.5 Percent

  

September

5.3 Percent

16.7 Percent

  

October

4.4 Percent

14.1 Percent

  

November

5.5 Percent

3.7 Percent

  

December

1.7 Percent

12.0 Percent

  
 

2004 vs. 2003

2004 vs. 2002

  

January

0.9 Percent

4.5 Percent

  

February

(2.5) Percent

(2.9) Percent

  

March

4.9 Percent

(7.4) Percent

  

April

3.1 Percent

2.1 Percent

  

May

(3.0) Percent

(1.1) Percent

  

June (estimated)

0.5-1.5 Percent

0.5-1.5 Percent

  

1 Department of Transportation Arrivals within 14 minutes

2 System Mainline Mileage Completion Percentage

3 Consolidated load factor (including Continental Airlines and Continental Express) needed to break even on a consolidated net income

basis. Actual consolidated breakeven load factor may vary significantly from estimates depending on actual passenger revenue yields,

fuel price and other factors. Month-to-date consolidated load factor information can be found on Continental's website at

continental.com in the Investor Relations-Financial/Traffic Releases section.

4 Expenses related to net fair market value adjustment of trading securities and charge related to MD-80 aircraft retirements accounts for

2.8 percentage points

5 Charge related to MD-80 aircraft retirements accounts for 1 percentage point

6 Includes Continental Airlines and Continental Express

 

 

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