Houston-based Continental Airlines reiterated this earlier warning by announcing in this Form 8K filing that it is forecasting continued “significant” losses for 2005, but projecting cash flows and reserves are sufficient to carry it through the year so long as employee unions approve management’s proposed spending reductions. The company said in this latest filing that it expects ratification of the new labor contracts by the end of March.
Continental’s update followed similarly downbeat forecasts issued in recent days by other legacy airlines. Continental expects cash expenditures during the quarter of $200 million, which would allow it to come out of the first quarter with decent unrestricted cash and short-term investments balance of $1.3 billion to $1.4 billion.
Continental also said in the filing that it does not currently have any fuel hedges in place, which is a move that has protected Southwest Airlines from escalating oil prices.