Continental Airlines Inc., the nation's fifth biggest carrier, reported a $206 million loss for the fourth quarter, citing continued high fuel costs, fare erosion from competitive pressures and what it called excessive government taxes and fees.
The loss reported Thursday amounted to $3.12 a share came despite improving economic conditions that bolstered travel demand in the last three months of the year. It adds to more than $650 million that Continental has lost since the beginning of 2001.
Continental had earned $47 million, or 61 cents a share, in the fourth quarter a year ago.
The latest quarterly loss included $14 million mostly from retirement of aircraft and $18 million related to a change in expected future costs for frequent flyer reward redemptions on alliance carriers.
Continental, excluding the special items, reported a quarterly loss of $174 million, or $2.62 per share — better than the Thomson First Call mean estimate of $3.29 loss per share.
The company said it incurred $258 million in fees and non-income related taxes for the latest quarter and $1.05 billion for the full year, charged on passenger tickets by various governmental entities.
Revenue for the latest quarter improved 6.7 percent from the year-ago period to $2.2 billion.
Continental said it lost $363 million, or $5.55 per share, for the year, joining other struggling air carriers in wrapping up 2004 on a negative note.
"The last few years have been challenging to say the least. Unfortunately we have another tough year ahead of us," said Continental Chairman and Chief Executive Larry Kellner.
Executives said cost control continues to be a focus in the face of the losses. Earlier this month, the Houston-based airline finalized $99 million in wage and benefit cuts for non-union domestic airport ticket, gate, ramp, operations and cargo agent workers.
The cuts will save the carrier part of the $500 million annually that it wants from employee groups by Feb. 28 to fend off a potential liquidity crisis, layoffs and deeper payroll cuts in light of soaring jet fuel costs.
Continental, with more than 41,000 employees, had already announced $70 million in cuts in wages, benefits and work rule changes for other nonunion employees such as management, reservations, food services and clerical workers. Negotiations continued with pilots, flight attendants and mechanics.
"These reductions will be difficult and painful but by facing these decisions now, we will ensure the long term future of our company," Kellner said.
Clark Orsky, an analyst with KDP Investment Advisers, noted Thursday that Continental, the last of major carriers to seek such concessions from workers, had reached that last resort because other cost cuts hadn't restored profitability.
"The writing's on the wall for the industry," Orsky said. "Costs have got to come down in order to meet the drop in revenues that has occurred. They can't keep holding out hope, and the sooner employees get that, the better for the company."
Kellner, who succeeded Gordon Bethune as chairman and chief executive in late December, will take a 25 percent cut in pay and long-term bonuses. Other top executives agreed to take 20 percent cuts in pay.
The carrier said earlier that it also expects to report losses in 2005 unless conditions improve.
