Continental Airlines, Inc.
Continental Airlines, Inc.: SWOT Analysis &
Reference code: BRTT021CP10-Q4
Published: March 2010
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Continental Airlines, Inc. - SWOT Profile Page 1
Continental Airlines, Inc.
Continental Airlines, Inc. - Company Overview
Continental Airlines, Inc. (Continental), a Star Alliance member, is a US-based airlines company. The company primarily
provides air transportation services across the globe, transporting passengers, cargo and mail. As of 31st Dec 2009, the
company flew to about 118 domestic and 124 international destinations around the world, besides providing additional
connections through alliances with domestic and foreign carriers. As on the same date, it directly served about 28 Trans-
Atlantic destinations, 11 Canadian cities, seven South American cities and four Trans-Pacific destinations from the US
mainland. The company flew to these destinations using a fleet comprising 337 mainline jets and 264 regional aircraft. Its
regional flights are operated on its behalf under capacity purchase agreements with other carriers. Besides air
transportation services, the company offers Continental Airlines Business MasterCard, corporate travel expense
management products, and travel services under the EliteAccess brand name. Continental is headquartered at Houston
(Texas) in the US.
The company reported revenue of (U.S. Dollars) USD 12,586.00 million during fiscal year ended December 2009, a
decrease of 17.42% over 2008. The company posted an operating loss of USD 146.00 million during the fiscal year 2009,
as compared to an operating loss of USD 314.00 million during 2008. The company incurred a net loss of USD 282.00
million during the fiscal year 2009, as compared to a net loss of USD 586.00 million during 2008.
Continental Airlines, Inc. - Key Facts
Continental Airlines, Inc., Key Facts
1600 Smith Street, Houston,
CAL (New York Stock
Texas (TX), 77002, United Ticker Symbol, Stock
Corporate Address: Exchange)CAL.A (New York
Exchange Stock Exchange)
Telephone + 1 713 3242950 No. of Employees 39,640
Fax + 1 713 5206329 Financial Year End December
URL www.continental.com Revenue (in USD Million) 12,586.00
Industry Transport and Logistics
Locations United States
Source: Annual Report, Company Website, Primary and Secondary Research
Continental Airlines, Inc. - SWOT Profile Page 2
Continental Airlines, Inc.
Continental Airlines, Inc. - Business Description
Continental is a leading provider of air transportation services to various nations. In addition, it offers Continental Airlines
Business MasterCard, corporate travel expense management products, and travel services under the brand name,
EliteAccess. As of 31st Dec 2009, the company flew to about 118 domestic and 124 international destinations around the
world, besides providing additional connections through alliances with domestic and foreign carriers. As on the same date,
it directly served about 28 Trans-Atlantic destinations, 11 Canadian cities, seven South American cities and four Trans-
Pacific destinations from the US mainland. The company flew to these destinations using a fleet comprising 337 mainline
jets and 264 regional aircraft.
The company operates its business through two reportable segments, namely, Mainline and Regional segments.
The company’s Mainline segment comprises its operations of flights to cities using larger jets. As on December 31, 2009,
its mainline fleet comprised 337 aircraft, which include 152 owned aircraft and 185 leased aircraft. Its fleet predominantly
comprises Boeing 737-800, with 117 of those in its fleet, as of December 31, 2009. About 51% of its mainline operations
concentrate on international services. During fiscal 2009, the company generated revenue of USD 10,635 million from the
Mainline segment, down 17.1% on a year-on-year basis.
The company’s regional operations are conducted by other operators on its behalf, mainly under capacity purchase
agreements. The company schedules and markets regional flights provided by other operators under capacity purchase
agreements. The company’s regional routes using regional jet aircraft are operated as Continental Express by ExpressJet
and Chautauqua, and regional routes served using turboprop aircraft are operated as Continental Connection through
CommutAir and Colgan. As of December 31, 2009, the company’s regional operators served 102 destinations in the US,
26 cities in Mexico and eight cities in Canada. The company’s regional service complements its mainline operations by
carrying traffic that connects to its mainline jets and allows more frequent flights to smaller cities than could be provided
economically using its mainline jet aircraft. At present, additional commuter feed traffic is provided to Continental by other
alliance airlines. During fiscal year 2009, the company generated revenue of USD 1,951 million from the regional
segment, down 19.2% on a year-on-year basis.
The company operates its domestic network out of its hubs at Newark Liberty International Airport, George Bush
Intercontinental Airport (Houston) and Hopkins International Airport (Cleveland) along with international destinations
through Mexico, Europe, Canada, Central & South America and the Caribbean.
The company has 13 subsidiaries located across various places. Some of its key operating subsidiaries include Air
Micronesia, Inc.; CAL CARGO, S.A. de C.V.; CALFINCO Inc.; Century Casualty Company, Continental Airlines de
Mexico, S.A.; Continental Airlines Domain Name Limited, Continental Airlines Finance Trust II, Continental Airlines Fuel
Purchasing Group, LLC; Continental Airlines Purchasing Holdings LLC; and Continental Airlines Purchasing Services
The company has classified its geographical operations under four geographical areas, namely, Domestic, Trans-Atlantic,
Latin America, and Pacific. During fiscal 2009, the company generated revenue of USD 6,941 million from Domestic, USD
2,614 million from Trans-Atlantic, USD 1,947 million from Latin America, and USD 1,084 million from Pacific.
The company has recently announced new twice-weekly non-stop services between Texas (Houston’s Bush
Intercontinental Airport) and Mexico (Tuxtla Gutierrez, Chiapas), beginning June 9, 2010. This will further expand the
company’s route network to Mexico. It also proposed to operate nonstop service from its hubs at New York/Newark and
Guam to Tokyo's Haneda Airport. Various new routes introduced in the recent past include flights from Los Angeles and
Orange County to Maui and a flight between Orange County and Honolulu.
Recently, the company inked a tentative agreement for a new four-year labor contract with the Transport Workers Union,
which represents Continental dispatchers. The company will also begin a codesharing agreement with All Nippon Airways
Co., Ltd. (ANA) on routes between the US and Japan effective March 28, 2010.
The company also decided to change its in-flight meal service this fall by introducing a variety of high quality, healthy food
choices for purchase in economy class on various US/Canada and certain Latin American routes. Also, from the second
quarter 2010, the company is to offer Gogo Inflight Internet service on its 21 Boeing 757-300 aircraft, which predominantly
fly on the domestic routes.
As of December 31, 2009, the company had firm commitment to purchase 84 new aircraft comprising 55 Boeing 737
aircraft, four Boeing 777 aircraft and 25 Boeing 787 aircraft scheduled for delivery from 2010 through 2016. The company
expects six 787-8 aircraft from Boeing during the second half of 2011, four 737-900ERs in the second quarter of fiscal
2011, and three 737-800s, during the first and third quarters of fiscal 2011, in addition to two Boeing 777 aircraft and 12
Boeing 737 aircraft in 2010.
For the full year 2010, the company expects consolidated and mainline load factor in the range of 81% to 82%.
Continental’s consolidated capacity to increase in the range of 1% to 2%. Its mainline capacity is projected to be up 1% to
2%, while its mainline domestic capacity is projected to decline by 1%, even as its mainline international capacity is
projected to increase by about 4% to 5%. The increase in mainline international capacity is primarily due to the run-rate of
Continental Airlines, Inc. - SWOT Profile Page 3
Continental Airlines, Inc.
international routes added in 2009 and the restoration of the company’s all scheduled services to Mexico, following its
capacity reduction in 2009 at the wake of H1N1.
Moreover, as of March 18, 2010, the company's scheduled debt and capital lease payments for the full year 2010 are
USD 982 million, with about USD 143 million, USD 454 million, USD 76 million and USD 309 million scheduled to be paid
in the first, second, third and fourth quarters of 2010, respectively.