This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Continental Riffs

Continental Airlines (CAL - Get Report) President Jeff Smisek was particularly candid in an address he gave at the Bear Stearns Global Transportation Conference last week in New York.

In addition to some colorful insights on the industry, Smisek offered his own frank observations about the airline's competitors. The criticisms, some of which were not-so-thinly disguised references of specific industry players, offer a window into the highly competitive business of flying the friendly skies.

Here are some excerpts from Smisek's speech Wednesday:

On competitors who have wrested concessions from employees through bankruptcy: "Our network competitors have frankly screwed their employees by defaulting on their pension plans and taking away wage and benefits in a very hostile manner."

By contrast, Smisek said, Continental sought $500 million in wage and benefit reduction only after going through its system and slashing $1.2 billion in non-employee costs. Continental also retained its pension plans, he said.

On widespread efforts to move planes from domestic to international service, where yields are higher: "Continental was international before international was cool."

Continental has built its international system gradually over the past decade, Smisek said. For instance, it spent $1 billion to upgrade facilities at Newark Liberty International Airport in New Jersey. From Newark, Continental now offers transatlantic service to 28 cities in 15 countries, up from five cities in four countries 11 years ago.

On competitors' aging fleets: "Our competitors have got a lot of gas-sucking pigs for aircraft."

Continental, Smisek said, has gradually upgraded its fleet. It now costs Continental 24% less to produce a seat mile than it did in 1998, thanks to a more efficient fleet, he said, noting: "That's a permanent fuel hedge."

On reducing in-flight amenities to save money: "We did not follow our competitors in a race to the bottom to achieve a crappy product. ... We did not take off pillows, we did not take off blankets, we did not take off meals at mealtime and we will not charge fifteen bucks for an aisle seat."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
JBLU $23.59 2.65%
CAL $32.94 -0.30%
AAPL $118.44 -2.36%
FB $94.14 0.14%
GOOG $631.21 0.90%

Markets

Chart of I:DJI
DOW 17,598.20 -91.66 -0.52%
S&P 500 2,098.04 -5.80 -0.28%
NASDAQ 5,115.3820 -12.8990 -0.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs