Continental Airlines today reported 2006 net income of $343 million ($3.30 diluted earnings per share), a substantial improvement over the 2005 net loss of $68 million. 2006 net income includes a $92 million gain on the sale of a portion of the company's investment in Copa Airlines and a net charge from other special items of $53 million. Excluding special items, Continental's net income for the full year was $304 million ($2.95 diluted earnings per share), a substantial improvement over the 2005 net loss of $205 million excluding special items.

In spite of fuel price increases costing over $510 million year-over-year, 2006 net income improved on strong revenue growth, which was up 17.1 percent year-over-year, and continued cost reduction initiatives.

"Because of the hard work of my more than 44,000 co-workers, we were able to deliver solid results for the year," said Larry Kellner, Continental's chairman and chief executive officer. "We look forward to distributing $111 million in profit sharing on Valentine's Day."

Continental reported a fourth quarter 2006 net loss of $26 million ($0.29 diluted loss per share), including a special charge of $22 million related to lump-sum payments to retiring pilots. Excluding the special charge, Continental recorded a net loss of $4 million ($0.04 diluted loss per share).

Operating income for the fourth quarter of 2006 was $20 million ($42 million excluding special charges), the largest fourth quarter operating income since 2000. This was an improvement of $114 million ($115 million excluding special charges) over the same period of 2005.

Revenue and Capacity

Passenger revenue for the quarter increased 10.6 percent ($274 million) over the same period in 2005 to $2.9 billion. Passenger revenue for the year increased 17.3 percent ($1.8 billion) over the same period in 2005 to $12 billion. For both the quarter and the year, the company had double digit percentage growth in each international geographic region.

Consolidated revenue passenger miles (RPMs) for the quarter increased 8.7 percent year-over-year on a capacity increase of 6.1 percent, resulting in a record fourth quarter consolidated load factor of 79.8 percent, 1.9 points above the previous fourth quarter record set in 2005. Consolidated yield for the quarter increased 1.8 percent year-over-year. Consolidated revenue per available seat mile (RASM) for the quarter increased 4.3 percent year-over- year due to increased yield and record load factors.

Mainline RPMs in the fourth quarter of 2006 increased 8.8 percent over the fourth quarter 2005, on a capacity increase of 6.0 percent. Mainline load factor was a record 80.2 percent, up 2.1 points year-over-year. Continental's mainline yield increased 2.9 percent over the same period in 2005. As a result, fourth quarter 2006 mainline RASM was up 5.5 percent over the fourth quarter of 2005.

During the quarter, Continental continued to achieve domestic length-of- haul adjusted mainline yield and RASM premiums to the industry.

"In 2006, we grew revenue at almost twice the rate we grew capacity, and we grew mainline capacity more than any of the other major network carriers," said Jeff Smisek, president of Continental. "Our great people and product helped return us to profitability."