This summary is based on the first quarter fiscal 2008 earnings call conducted by Continental Airlines Inc. (CAL: chart) on April 16, 2008.

Management:

President: Jeffery Smisek
Chairman and CEO: Larry Kellner
EVP and CFO: Jeff Misner
Senior VP of Finance and Treasurer: Garry Laderman
EVP of Marketing: Jim Compton
Senior VP of Corporate Communications: Ned Walker
Director, IR: DeAnne Gabel

Key Investor Issues:

- Q1 loss per share was 81 cents versus EPS of 21 cents in Q1 of 2007.
- Quarterly total revenue increased by $391 million from $3.2 billion a year ago quarter.
- Quarterly operating loss was $66 million versus operating income of $64 million Q1 of 2007.

First Quarter 2008 Financial Highlights:

The company posted Q1 net loss of $80 million.

- Excluding a $5 million after tax gain from the sale of aircraft, the carrier posted a net loss of $85 million, or loss of 86 cents per share.
- The fuel costs increased by $364 million during the quarter versus last year.
- The crude oil prices peaked at $110.33 per barrel and Gulf Coast jet fuel peaked at $139.67 per barrel during the quarter.
- The company incurred additional Q1 fuel costs of $69 million year-over-year that were included as part of its regional capacity purchase cost.
- The management reported that the total year-over-year impact of higher fuel costs on the company for the first quarter was $433 million.

The total revenue for the quarter was $3.6 billion, representing an increase of 12.3% from the same period last year.

- The passenger revenue grew 11.3% versus the first quarter of last year.
- As a result of record high fuel prices, a weakening economy and a weaker dollar, the airline plans to reduce domestic mainline capacity by 5% on an annual run-rate basis beginning in the fall.
- The company anticipates that its 2008 mainline capacity, including international growth, will increase about 2% and that the 2009 mainline capacity, including international growth, will be approximately flat versus 2008.

The consolidated revenue passenger miles (RPMs) for the quarter increased 3.9% year-over-year, on a capacity increase of 4.1%.

- This resulted in a first quarter consolidated load factor of 78.5%, 0.2 points below the previous first quarter record set in 2007.
- The consolidated yield for the quarter rose 7.2% year-over-year.
- The consolidated revenue per available seat mile (RASM) for the quarter increased 7% year-over-year, due to increased yields.

- The mainline RPMS for the quarter rose 4.4% compared with same period last year. This was on a capacity increase of 4.8%.
- The mainline load factor was 78.8%, a decrease of 0.3 points year-over-year.
- The carrier’s mainline yield increased 7.2% versus the year ago quarter.
- The mainline RASM for the quarter rose 6.7% compared with Q1 of 2007.

The management reported that the carrier’s mainline cost per available seat (CASM) increased 11.6% in the first quarter versus same period last year.

- This represents a decline of 0.3% holding the fuel rate constant and excluding special items.
- The company’s average price per mainline gallon of fuel, inclusive of fuel taxes, increased 47.6% year-over-year.
- During the quarter, the price of a barrel of West Texas Intermediate crude oil averaged close to $100 per barrel compared with less than $60 per barrel for the same period last year.
- The company’s annualized fuel costs increased by about $45 million for each $1-per-barrel rise in the price of crude.
- With the increasing fuel prices, the management is implementing another round of cost reduction and revenue generating initiatives, which are expected to result in more than $200 million of annual benefits when fully implemented.
- The management reported that the airline’s young, fuel efficient fleet provides a natural hedge against rising jet fuel costs. The carrier is about 35% more fuel efficient per mainline revenue passenger mile than it was in 1997. With mainline RPMs up 4.4% for the quarter, mainline fuel consumption increased only 3.9%.
- During the quarter, the company installed winglets on eight of the company’s 737-500s and two 737-900 aircraft.
- The carrier hedged about 22% of its fuel requirements for Q1 of 2008, recording a gain of $29 million.
- As of March 31, 2008, the company had hedged approximately 18% of its projected fuel requirements for Q2 of 2008 and 5% for Q3 of 2008.
- The company ended the quarter with about $2.5 billion in unrestricted cash and short-term investments.

The airline expects to remove from service an additional 14 older, less fuel efficient 737-300 aircraft, as leases expire on those aircraft from September 2008 to April 2009.

- The 14 aircraft are in addition to the 34 737-300s and 500s that were already planned to be removed from service in 2008 and 2009.
- The company expects to reduce regional jet capacity beginning in the fall of 2008. The management noted that they are flexible, as they continue to negotiate better economics with ExpressJet.

The company employees earned $6 million in cash incentives for twice finishing in the top three of the network carriers for monthly on-time performance in the quarter.

- The carrier recorded a U.S. Department of Transportation (DOT) on-time arrival rate of 71% and a system wide mainline segment completion factor of 98.9% for the quarter.

- The airline was also rated the top airline on FORTUNE magazine’s airline industry list of World’s Most Admired Companies.
- This is the fifth consecutive year that the airline has topped the list.