Houston-based Continental Airlines announced yesterday a modest third-quarter profit despite high fuel costs, parleying lower labor costs with increased revenue from its international flights and higher fares. Nevertheless, Continental announced that it expects to post a “significant loss” for the fourth quarter and that it will lose money for the full year. With various U.S. airlines currently operating in chapter 11, it is expected that combined losses in the U.S. airline industry this year will exceed $5 billion. For its part, Continental said that it had “sufficient” cash and projected cash flows through 2006.
Talk about a tough business. Announce a quarterly profit, reiterate that the company will lose money for the year, and offer that the company might be able to stay out of the tank for another year. And that’s considered a relatively rosy quarterly earnings report within the industry. So it goes in the U.S. airline industry, which is in dire need of a huge shakeout at a time when it remains difficult to put an airline out of its misery.