Continental Sees Q4 Charges, Hedge Loss
Continental Airlines said on Wednesday fourth-quarter earnings would be cut by pilot pension payouts and a big loss on fuel hedging contracts with a bankrupt counter-party.
The airline said it would take a charge of USD$44 million for payouts to retiring pilots as the airline cuts its flights in the face of volatile fuel prices and waning demand.
It is to take a further USD$125 million charge on some fuel derivative contracts with an unnamed counter-party, whose parent declared bankruptcy on September 15 last year. That is the day Lehman Brothers filed for bankruptcy protection.
Factoring in a gain on aircraft sales and other one-time charges relating to severance and writing down the value of some securities, Continental said fourth quarter profit would be cut USD$170 million.
For the full year, it said these and other one-time items would cut USD$234 million from profit.
Wall Street analysts expect Continental to report a net loss of USD$166 million when the airline reports quarterly earnings next Thursday.
The airline's shares closed down USD$2.16 at USD$17.37.
Copyright © 2009 Aviation News Release
