Grants help Continental stay aloft.
Continental Airlines, which operates services from Birmingham to New York, yesterday posted third quarter profits of more than pounds 2 million, helped by pounds 169.9 million in federal grants aimed at staving off the sharp fall in air travel after the US attacks.
Quarterly revenues fell to pounds 1.55 billion from pounds 1.83 billion a year earlier. Continental ended with pounds 839 million in cash.
The airline also said that it was in talks with Boeing about the deferral of some of its firm aircraft orders scheduled for delivery between 2002 and 2005.
US airlines are expected to report as much as pounds 3.5 billion in losses this year. Before the September 11 attacks, Continental had been one of the few major US airlines posting profits this year.
Amid warnings of potential bankruptcies, the Bush administration has approved a pounds 10.5 billion aid package for the airline industry.
Since January, Continental shares have plummeted more than 67 per cent after falling sharply immediately in the wake of the attacks. In contrast, the broad benchmark S&P500 index has fallen about 19 per cent over a similar period while the American Stock Exchange Airline Index has shed about 59 per cent over that time. Wall Street analysts said while Continental had managed to reduce costs, it still faced hurdles to recovery.
'Like all airlines, it struggles to regain the confidence on the flying public. The rate of improvement has not been encouraging so far,' said Samuel Buttrick, a UBS Warburg airline analyst.
Meanwhile, UK Government ministers yesterday agreed to further extend a war risk insurance scheme for airlines still battling to overcome the impact of the September 11 terrorist attacks in the US.