Continental Airlines said late Thursday that its monthly traffic grew for the first time in more than a year, but fewer business travelers and lower ticket prices continued to pressure revenue.
For September, the world’s fifth largest airline said its consolidated unit revenue plunged an estimated 18.5% to 19.5% from a year ago. Mainline unit revenue fell 20% to 21%.
Monthly revenue results were worse than in August, which saw a consolidated year-over-year decline of 17.2%, and a mainline decline of 17.9%.
However, after adjusting for the impact of Hurricane Ike last year, reduced capacity and frequent-flier liability change, September’s decline was less than July and August, said FTN Capital Markets analyst Michael Derchin.
“It really is improving, [it’s] just masked in September by unusual things going on last year,” he said.
Shares of Continental rose 3.6% to close Friday at $15.62. The stock had a good run last month as the industry tapped less restrictive credit markets to raise cash for the leaner winter months ahead, climbing more than 30%.
J.P. Morgan analyst Jamie Baker, in a note to clients, said the severity in Continental’s September revenue and yield was as expected.
“Based on the mid-range of Continental guidance, September revenue declined approximately 18.6% with a yield decline of 24%,” said J.P. Morgan analyst Jamie Baker.
That was “unsurprising,” he said.
“As noted several weeks ago, we believe tangible evidence of a corporate air travel recovery will not occur until year-end or early next year,” Baker wrote in a note to clients.
But September also saw a return of traffic growth for the Houston-based carrier for the first time since last August, helped by a favorable year-ago comparison. In 2008, Continental’s operations were impacted by Hurricane Ike, which caused a multi-day closure of its Houston hub.
Total traffic in September rose 7% to 6.9 billion revenue passenger miles from 6.5 billion. A revenue passenger mile is one passenger flown one mile.
And that bodes well for other airlines which are eager to start lifting ticket prices after months of fare slashing.
AirTran Holdings Inc. said Friday its September traffic shot up 11% from a year ago even as capacity grew 7.2%. Load factor — or the percentage of available seats filled with passengers — was also up, adding 2.6 points at 77%.
Continental’s capacity was also up slightly for the month, adding 0.5% to 8.5 billion available seat miles. Load factor rose five points from last year to 81.5%.
Continental said it ended the third quarter with about $2.6 billion in unrestricted cash, cash equivalents and short-term results.