Continental Airlines Inc (fka CAL)

[Swany]

Continental Air CEO Says Business Traffic Is StabilizingLast update: 6/11/2009 10:39:36 AM

By Ann Keeton
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)--The falloff in business travel, the most profitable part of the airline business, is stabilizing, Larry Kellner, chairman and chief executive of Continental Airlines, Inc. (CAL) said Thursday. A recovery in business travel could happen quickly as the world economy gets stronger, he added, although there's no sign of a rebound yet. International travel has been hit by fears related to the spread of the H1N1 virus, Kellner said, although the market in Asia is showing recovery. The Houston airline said earlier that it lost $30 million of revenue in May, mainly on canceled flights to Mexico, as passengers stopped flying due to fears of the illness. "We've got to be flexible as we navigate the market," Kellner said. That includes adding passenger fees to match competitors and cutting route capacity to keep pace with passenger traffic. "We have had a very tough spring in the New York area," Keller said, calling on government regulators to assist with flight congestion there. "We need to work on short-term fixes for the New York air space. We need a long-term focus on fixing the air traffic control system." A modern ATC system could also save 10% on carbon emissions and fuel use, the executive said at the Bank of America Merrill Lynch Transportation Conference in New York, which was Web cast. For the long term, Continental will continue to invest in its fleet of aircraft, including Boeing's new 787, Kellner said. "Our new fleet is a hedge against fuel," he said, adding that it paid off quickly to add winglets to older aircraft. Kellner said Continental is on track to drop out of the Skyteam global airline alliance on Oct. 24 and "in minutes or days" after join the competing Star Alliance, where it plans to form closer ties with United Airlines. -By Ann Keeton; Dow Jones Newswires 312-750-4120;[e-mail] (END) Dow Jones NewswiresJune 11, 2009 10:39 ET (14:39 GMT)