Profit at Continental; Losses at American and Northwest
Bankrupt Northwest Airlines projected this week a pre-tax loss of $1.7 billion for 2005, representing the largest in its history, due to high fuel costs, inability to raise fares, and high labor costs.
Continental Airlines reported this week it earned $61 million in the third quarter, despite facing higher cost of jet fuel and two hurricanes, as a 7 percent increase in passenger traffic and higher fares helped the bottom line.
American Airlines parent AMR Corp. reported Wednesday that it decreased its quarterly loss to 153 million dollars from 214 million a year ago, but warned that if the high fuel prices remain and the airline is unable to pass them on to consumers, there may be a significant loss in the fourth quarter.
To cover the increase in fuel costs over the past two years, American would have had to raise fares nearly 75 dollars per roundtrip ticket, while it has been only able to increase them by 15 dollars.
Cost-cutting initiatives, including limiting capacity, are being aggressively sought by all three airlines.
Charles Kao
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