Continental Airlines said on Tuesday it would take charges to cover the costs of scaling back flights, as it battles record fuel prices, and said, on average, its planes were less full in June than a year ago.
The fourth largest US airline, which said last month it would cut jobs, retire old planes and reduce domestic flying in the fourth quarter, said it would announce on July 11 special charges against its second-quarter financials for scaling back its operations, potentially including impairments to its owned aircraft and related spare parts.
It said it also would announce other special items recorded in the second quarter, including gains on the sale of its investment in Panama's Copa Airlines, and an adjustment to the fair value of its investment in student loan-related auction rate securities.
The airline said it expects to take additional accounting charges in the third quarter and beyond relating to future costs of its capacity reduction, including lease costs on grounded aircraft, severance and continuing medical coverage for furloughed employees. It said it was not able to estimate the amount or timing of these charges.
For the month of June, Continental reported a consolidated load factor of 83.6 percent, 2.1 points below the same month a year ago, meaning that overall its planes were less full.
It said consolidated passenger revenue per available seat mile -- the industry standard measurement of unit revenue -- is estimated to have increased between 4 percent and 5 percent over June 2007.
Continental said it ended the second quarter with unrestricted cash and short-term investments of USD$3.41 billion on its books.
