Airlines' Tough Earnings Day
It's a big day for earnings. And a tough day for airlines.
Continental Airlines posted a loss of $213 million, or $1.72 a share, in the quarter ended June 30. The carrier announced it will cut 1,700 jobs and raise fees for checking luggage by $5.
“We think the drop-off in business travel has stabilized, although clearly it's stabilized at a low level,” said Continental President Jeff Smisek on a conference call today. “We do think we've hit the bottom, but we don't know how long we'll bump along the bottom.”
In the first half of the trading day, Houston-based Continental's shares dropped 9.45 percent to $9.21.
UAL, the holding company of United Airlines, reported a small profit. But excluding one-time items, including accounting charges, it recorded a loss of $323 million, or $2.23 a share. To better position the company for recovery,UAL said it will shrink its international capacity by an extra 7 percent this year.
The Chicago-based carrier's shares rose 3.7 percent to $3.64.
Southwest Airlines distinguished itself from its rivals by reporting a gain of $54 million, or 7 cents per share, ending three straight quarters of losses. But the carrier also announced 1,400 employees have taken voluntary buyout packages.
Dallas-based Southwest's stock fell 7.7 percent to $6.74.
It's difficult to forecast if there will be clear skies ahead, said Southwest chairman and chief executive Gary C. Kelly.
"We cannot predict a profitable third quarter," he said.
The comments to this entry are closed.