STOCK OF THE WEEK: CONTINENTAL AIRLINES: POISED FOR ALTITUDE

Despite Hurricanes Katrina and Rita, Continental Airlines Inc. (CAL) recently reported a 9.8% increase in their September traffic and analysts expect Continental to earn 8 cents a share in the third quarter. This good news comes after a 2nd quarter profit July.

The airline said their strong performances in July and August helped offset some of the negative impacts from the Hurricanes as well as higher fuel prices. Continental Airlines Inc. estimates that the adverse impact in September on operating results from Hurricane Rita was about $25 million. After the Rita storm, the airlineInc.helped evacuate Houston residents by cutting fares and also waived change fees for travelers who changed their travel plans.

Continental Airlines Inc.operates the world's six-largest air carrier, transporting passengers, cargo, and mail with hubs in Newark, Houston, and Cleveland. Its ExpressJet affiliate also operates regional planes as Continental Express. Continental operates a fleet of more than 350 aircraft with about 42,000 employees.

Continental Airlines Inc. said it flew 6.2 billion consolidated revenue passenger miles, or RPMs, up from 5.6 billion a year earlier. A revenue passenger mile is one paying passenger flown one mile. Continental said September's consolidated load factor (percentage of seats filled) was 77%, 2.5 points above last year's load factor of 74.5%.

Focusing on domestic flights, the carrier reported a domestic mainline load factor of 79%, 4.7 points above a year earlier and international mainline load factor of 75.4%, 1 point below September 2004.

A bright star in the sky? The average cost per available seat mile of the other major airlines in 2004 was almost 9% higher than Continental's, while the average revenue per available seat mile was about 1% lower. Continental may be one of the strongest major airlines, and wild swings in share price can make for tempting speculative trades.

The firm has announced plans to purchase 10 Boeing 787 Dreamliners as part of its effort to modernize its fleet and cut costs with more-efficient and less maintenance-intensive planes. Continental seems to be avoiding the temptation to grow at all costs.

Thanks to relatively good relations with its employees, Continental has avoided disruptive labor disagreements and maintains labor expenses lower than the major airline average. However, a Defined-Benefit Pension Bill sits on the floor of the Senate. If it makes it through the healthy airlines could face an estimated $10.4 billion in minimum pension contribution requirements over the next four years, more than some may be able to afford and stay in business. However, Sen. John Cornyn, R-Texas, has placed a hold on the legislation that could prevent it from coming to the floor.

Continental Airlines Inc. opened on Monday October 3th at 9.70. Are the airlines seeing a strengthening demand for their industry? If they stay focused on improving customer service, seeking business travel, and cutting costs I believe Continental is a stock poised to catch some altitude?

STOCK OF THE WEEK: CONTINENTAL AIRLINES: POISED FOR ALTITUDE

Despite Hurricanes Katrina and Rita, Continental Airlines Inc. (CAL) recently reported a 9.8% increase in their September traffic and analysts expect Continental to earn 8 cents a share in the third quarter. This good news comes after a 2nd quarter profit July.

The airline said their strong performances in July and August helped offset some of the negative impacts from the Hurricanes as well as higher fuel prices. Continental Airlines Inc. estimates that the adverse impact in September on operating results from Hurricane Rita was about $25 million. After the Rita storm, the airlineInc.helped evacuate Houston residents by cutting fares and also waived change fees for travelers who changed their travel plans.

Continental Airlines Inc.operates the world's six-largest air carrier, transporting passengers, cargo, and mail with hubs in Newark, Houston, and Cleveland. Its ExpressJet affiliate also operates regional planes as Continental Express. Continental operates a fleet of more than 350 aircraft with about 42,000 employees.

Continental Airlines Inc. said it flew 6.2 billion consolidated revenue passenger miles, or RPMs, up from 5.6 billion a year earlier. A revenue passenger mile is one paying passenger flown one mile. Continental said September's consolidated load factor (percentage of seats filled) was 77%, 2.5 points above last year's load factor of 74.5%.

Focusing on domestic flights, the carrier reported a domestic mainline load factor of 79%, 4.7 points above a year earlier and international mainline load factor of 75.4%, 1 point below September 2004.

A bright star in the sky? The average cost per available seat mile of the other major airlines in 2004 was almost 9% higher than Continental's, while the average revenue per available seat mile was about 1% lower. Continental may be one of the strongest major airlines, and wild swings in share price can make for tempting speculative trades.

The firm has announced plans to purchase 10 Boeing 787 Dreamliners as part of its effort to modernize its fleet and cut costs with more-efficient and less maintenance-intensive planes. Continental seems to be avoiding the temptation to grow at all costs.

Thanks to relatively good relations with its employees, Continental has avoided disruptive labor disagreements and maintains labor expenses lower than the major airline average. However, a Defined-Benefit Pension Bill sits on the floor of the Senate. If it makes it through the healthy airlines could face an estimated $10.4 billion in minimum pension contribution requirements over the next four years, more than some may be able to afford and stay in business. However, Sen. John Cornyn, R-Texas, has placed a hold on the legislation that could prevent it from coming to the floor.

Continental Airlines Inc. opened on Monday October 3th at 9.70. Are the airlines seeing a strengthening demand for their industry? If they stay focused on improving customer service, seeking business travel, and cutting costs I believe Continental is a stock poised to catch some altitude?

#