Continental Airlines today said its second-quarter profits sank more than 70 per cent as cutbacks in lucrative business travel spending eroded industry revenues.
Houston-based Continental reported earnings of $42 million or 74 cents per share compared with $149 million or $2.39 per share a year earlier, making it one of the few major US airlines analysts expect to report a quarterly profit, as the economic downturn takes its toll.
Many US airlines have been struggling with some of the sharpest revenue declines in two decades as corporations hold back on business travel to reduce costs in a sluggish economy. High-cost corporate travel can account for as much as two-thirds of airline industry revenue.
Aviation experts have been expecting the airline industry to post hundreds of millions in losses for the second-quarter, while forecasting that only Continental and low-fare airline Southwest Airlines - both of which are popular with leisure travelers - will report profits.
Hoping to cut distribution costs, airlines have also been encouraging customers to purchase tickets online through carrier Websites. Continental today reported second-quarter online ticket sales of $250 million as the number of domestic passengers using electronic ticketing increased to 74 per cent.
Continental's shares are off about 1.21 per cent while the broader benchmark Standard & Poor's 500 index has slipped more than 7 per cent. Its shares closed at $51 Friday on the New York Stock Exchange.